Kiel Institute in the News

Europe Just Reminded Trump Why He’s Mad at Them on Trade


Reference to a new study by Holger Görg, which shows that in the current trade war between the USA and China, the rocking up of tariffs also makes goods in other countries more expensive.

Excerpt from the Article

(...) Yet so far, the biggest headwind to European trade — and that’s key to its economy because exports make up some 46% of the bloc’s total output — has come from a conflict on the other side of the world.

A recent study by Germany’s Kiel Institute found that the EU, Canada and Mexico might face a more severe hit from the tariffs the U.S. and China have imposed on each other than the two countries themselves. That’s because products subject to import levies are often processed as intermediate goods and then shipped elsewhere, resulting in more expensive end products.

As much as Europe would like to stay out of the tussle that’s preoccupied the world’s two largest economies for more than a year, it’s too late for that. It’s already caught in the middle.

Complete article