German producers and alcohol producers may benefit from nearer commerce ties with the UK within the wake of President Donald Trump’s sweeping new US tariffs, in response to main audit, tax and advisory agency Blick Rothenberg.
The so-called ‘Liberation Day’ tariffs, introduced by the White Home this week, impose important levies on imports from 60 nations. Whereas the UK faces a ten% tariff, imports from the European Union might be hit with a 20% fee, creating new dynamics for international provide chains and exporters.
Nils Schmidt-Soltau, Head of the German desk at Blick Rothenberg, mentioned the brand new tariff construction may current a “silver lining” for German companies with a producing footprint within the UK.
“The lower tariff on UK imports could be regarded as a silver lining for German businesses with a manufacturing presence in the UK, given the 10% rate announced for UK imports compared to the 20% rate on EU imports,” he mentioned.
The adjustments may additionally open up new export alternatives for German alcohol producers. Germany is the EU’s third-largest wine exporter and the fourth-largest beer exporter, with the US as a key market. Nevertheless, Trump’s new tariffs on beer and wine imports threaten to stifle that circulation.
“German producers could turn their attention to the UK, which is the second largest wine importer globally after the US,” Schmidt-Soltau famous. “Although German alcohol exports to the UK are currently modest, there is significant potential for growth — especially as Germany was also the UK’s largest import partner in 2023.”
The shift might also immediate German brewers and winemakers to think about increasing their presence within the UK, both by means of direct exports or native partnerships.
Nevertheless, Germany’s carmakers are unlikely to profit. Regardless of the UK’s decrease tariff standing, Volkswagen-owned Bentley, BMW-owned Rolls-Royce, and Mini — all of which manufacture within the UK — will nonetheless be topic to the 25% tariff on automotive imports into the US, according to the broader trade ruling.
As international commerce relationships proceed to evolve, the UK’s post-Brexit flexibility on commerce phrases may show advantageous — not just for British exporters but additionally for European companies looking for to take care of entry to key worldwide markets, notably the US.
