Buy cheap, but at what cost?
Introduction of 20% of Customs Rights for European products can lead to a money laundering, which means the descent of prices of Europe.
This situation is caused by an increase in supply from China, but within the EU.
“One of the factors that lead to EU prices will naturally export countries like China and are now returned to Europe,” said Niklas Poetier’s researcher Nikles Boytiers Eurneus.
“The second factor that explains the fall of prices is that some exports to the United States are now in the market. For example, if the customs rights on Italian wine are high, the more alcohol will end in a unique market,” the researcher says.
At first glance, the descent of prices seems to be beneficial to the purchase power and consumption of Europeans and therefore.
But, on the other hand, the inflation is harmful to the economy, because it provokes families to postpone their purchases in anticipation of a new price.
This creates an evil circle of wage descent and increased unemployment.
Uncertain
As for the European External Relations Council (ECFR) investigator Tobias Kehrke, the current uncertainty is the biggest danger to the economy.
“These customs rights are widespread. All products will affect all the exports of Europe to the United States. Let’s think about machines, chemicals and cars. These companies can now face a burden,” the researcher tells Eurnevs.
“I think this is the biggest risk. The uncertainty of installing is that companies may not invest in Europe. This may have a very negative effect, and in a few months or a few years, employment and growth,” he added.
However, there are many unknown factors that economists do not have a crystal ball and make predictions difficult. In particular, China’s reaction and EU response will be overweight. US President Donald Trump can use customs rights as a lever in other negotiations.
By 2023, the European Union registered 48 billion euros with the United States.
