Trump risks a ‘dangerous tax spiral’

GERMANY’S BDI industry association said yesterday that the US risked causing a “dangerous spiral” if it went ahead with plans suggested by President Donald Trump to impose new taxes on imports from countries that levy tariffs on US products. Trump said on Monday that he would push for a “reciprocal tax” against countries – including US allies – that charge higher tariffs on imports than the US. He did not specify how such a tax would be structured. “If the US raises customs barriers, it could lead to a dangerous spiral. Instead of thinking about penalties and new trade barriers, we should further extend transatlantic trade and investment relations,” said BDI President Dieter Kempf yesterday. Kempf noted that the US was Germany’s most important export market after the other countries of the EU, and the fourth biggest partner for imports. The head of Germany’s BGA trade association, Holger Bingmann, said Trump’s suggestion signalled a further shift away from the rules-based order of the World Trade Organisation. – Reuters