The Kiel Institute for World Economy warned that US-China trade agreement is “significantly damaging” to the EU. Germany is “particularly affected”, and among the sectors, especially “aircraft and vehicle manufacturing.” Gabriel Felbermayr, Kiel President, said, “the additional imports of US goods promised by China will divert imports from other countries.”
As calculated by Felbermayr and trade expert Sonali Chowdhry, EU exports to China will probably be USD 10.8B lower in 2021 compared with a scenario in which the agreement and the tariff war between China and the USA would not have existed. The EU would then have to bear about a sixth of the overall trade diversion caused by the agreement.
In absolute terms, the biggest losers in the EU are the manufacturers of aircraft (USD -3.7B), vehicles (USD -2.4B), and industrial machinery (USD – 1.4B). In terms of relative changes, the largest relative losses would again be in the aircraft sector (-28%), vehicles (-7%), and pharmaceutical products (-5%). “The affected industries are mainly located in Germany, but France has also been hit considerably”, says Felbermayr.
