FRANKFURT, Germany—VDMA, a German rubber and plastics machinery manufacturers trade association, has denounced a trade war between the U.S. and the European Union.
Despite all efforts to defuse the conflict, President Trump's threat to impose a punitive tariff of 20 percent on cars from Europe remains unresolved, VDMA said in a July 5 statement.
"This and the countermeasures announced by the EU would mean significant cuts in bilateral trade. We'll get down to the nitty-gritty," VDMA Executive Director Thilo Brodtmann said.
The VDMA called on the EU to "take the offensive" and set transatlantic free trade negotiations in motion, arguing that an exclusive reduction in car tariffs with the U.S. would not work. This, it said, was because World Trade Organization compliant tariff reductions only can be implemented with all trading partners on board.
"We are calling for a lean free-trade agreement with the U.S. that will remove all industrial tariffs and non-tariff barriers to trade," Brodtmann said. This, he added, would remove the issue of bilateral customs duties "once and for all."
The announcement came ahead of the imposition of U.S. trade tariffs on $34 billion Chinese goods on July 6, and likely retaliatory measures by China.
According to the VDMA, the mechanical and plant engineering industry in Germany has been affected by the trade dispute between the U.s. and China.
This, it explained, is because "almost all" mechanical engineering products are included in the first U.S. list of punitive tariffs, including those of VDMA member companies that supply the U.S. from production facilities in China.
Rubber and plastics processing machinery are included in the products facing additional tariffs of 25 percent on goods from China.
"This 'tit-for-tat'-game between two major economic blocs is likely to put a strain on global trade as a whole because of the complex and fragile supply chains," Brodtmann said. "The only acceptable way to address what the U.S. calls China's unfair trade practices is to take them to the WTO arbitral tribunal. Both the EU and the U.S. have taken this path."