FRANKFURT, Aug 7 \u2014 While Germany\u2019s big companies groan under the US tariff burden, many small and midsize firms, the backbone of Europe\u2019s top economy, are confident their highly-specialised goods will just keep selling.<\/p>\n
The hope is that, in niche areas where American customers have no obvious alternatives, buyers across the Atlantic will just have to accept paying higher prices for their high-tech machines and products.<\/p>\n
\u201cThe customer in America pays the tariff,\u201d said Thorsten Bauer, co-head of laser maker Xiton Photonics, based in the western city of Kaiserslautern. \u201cWe don\u2019t notice a thing.\u201d<\/p>\n
Bauer\u2019s firm of about 20 workers is in this respect typical of the often family-owned enterprises that make up the German \u201cMittelstand\u201d, Deutsche Bank executive Jan-Philipp Gillmann said.<\/p>\n
\u201cGerman Mittelstand companies are somewhat protected since they are often very specialised, sometimes the only firm that makes a particular part,\u201d said Gillmann, Deutsche Bank\u2019s Head of Corporate Bank Europe.<\/p>\n
\u201cThe cost of the tariff will often be borne by the consumer.\u201d<\/p>\n
Under a framework deal agreed in late July, EU exports are set to face across-the-board US tariffs of 15 per cent from Thursday \u2014 higher than traditional duties but much lower than Trump\u2019s threatened 30 per cent.<\/p>\n
While German corporate titans such as automaker Volkswagen have grabbed headlines by taking tariff hits measured in the billions, many of the smaller firms hope to weather the headwinds.<\/p>\n
Brian Fuerderer, head and founder of Microqore Medical, a high-end surgical equipment maker with 32 employees, agreed.<\/p>\n
\u201cIt\u2019s not possible to just copy \u2018Made in Germany,\u2019\u201d he said. \u201cThere\u2019s not much comparable to what we in Germany do when it comes to medical technology.\u201d<\/p>\n
He added that US tariffs would have to rise to 30 or even 40 per cent before American customers got cold feet.<\/p>\n
\u201cFor Volkswagen, for big business, it\u2019s hard,\u201d he said. \u201cBut if you have a real niche, something only certain specialists can do, demand will carry on as before.\u201d<\/p>\n
\u2018No legal certainty\u2019\u00a0<\/strong><\/p>\n The Mittelstand\u2019s rugged optimism defies Trump\u2019s repeated statements that foreign companies \u2014 not American importers or consumers \u2014 will pay the tariffs.<\/p>\n That does not mean the levies \u2014 and the past months of uncertainty around them \u2014 have left the small and medium enterprises entirely unscathed.\u00a0<\/p>\n The United States is Germany\u2019s largest trading partner and Trump\u2019s on-again, off-again tariff blitz has already had an impact.<\/p>\n \u201cWhen all the tariffs started, I made no US sales for three months,\u201d Bauer said. \u201cYou don\u2019t spend money if you don\u2019t know how things will look in the next six months.\u201d<\/p>\n He hopes the latest agreement fixing duties at 15 per cent, up from a provisional 10 per cent in the lead-up to an August 1 deadline, will at least give American companies the confidence to place orders again.<\/p>\n But he is not entirely sure, pointing to Trump\u2019s highly changeable tariff policies.<\/p>\n \u201cThere\u2019s no legal certainty, basically,\u201d Bauer said. \u201cI am trying to push up sales in Europe with discounts and things like that, to be less dependent on the international market.\u201d<\/p>\n \u2018Regulating ourselves to death\u2019\u00a0<\/strong><\/p>\n About a quarter of Xiton Photonic\u2019s sales are exports to the United States and it would be hard to diversify, Bauer said, since his high-tech customers are more often found in Japan, China or America than in Europe.<\/p>\n Wider geopolitical tensions mean there is no easy answer.<\/p>\n \u201cChina could equally turn around tomorrow and say: \u2018We are not importing anything from the EU,\u2019\u201d said Bauer.<\/p>\n \u201cIn that case I\u2019d be just another leaf blown about by the wind.\u201d<\/p>\n Fuerderer, whose company makes half its sales in the United States, said that relocating production there could make sense for some firms in the sector over the long term, particularly given high energy costs and burdensome bureaucracy at home.<\/p>\n \u201cThe US government wants companies to manufacture in the United States and they have tax breaks, grants and subsidies to make it happen,\u201d he said.<\/p>\n In Europe, by contrast, Fuerderer said \u201cwe are regulating ourselves to death. People are afraid to put money on the table and try something new.\u201d \u2014 AFP\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"FRANKFURT, Aug 7 \u2014 While Germany\u2019s big companies groan under the US tariff burden, many small and midsize…\n","protected":false},"author":2,"featured_media":325759,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5310],"tags":[2000,299,117489,1824,117493,117491,554,117490,117492],"class_list":{"0":"post-325758","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-germany","8":"tag-eu","9":"tag-europe","10":"tag-german-mittelstand","11":"tag-germany","12":"tag-microqore-medical","13":"tag-specialised-goods","14":"tag-trump-tariffs","15":"tag-us-germany-trade","16":"tag-xiton-photonics"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114988689907452013","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/325758","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=325758"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/325758\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/325759"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=325758"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=325758"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=325758"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}