By RAYA FIDLERMAN The Berliner Zeitung reports German trade tariffs on German food are set to rise to 6 percent next year, a figure that the German government says is needed to meet growing demand from China.
The rise in tariffs, set to come into force on March 31, comes after the German Federal Trade Administration announced in November that the country would have to cut imports from China by a whopping 70 percent by 2020, a move that is expected to cost German businesses between $30 billion and $50 billion.
The chancellor, Angela Merkel, has been pushing to slash tariffs on imports from the world’s second-largest economy to a minimum of 2 percent by the end of this year, but has faced intense criticism from trade union leaders and economists for her decision.
In November, the government said it would cut tariffs on imported German cheese by 7 percent, beef by 10 percent, poultry by 13 percent and eggs by 15 percent.
The government said that by the middle of this month, it would also reduce tariffs on food produced by the German agricultural sector.
“The German government is making a strategic decision, which will have a significant impact on the competitiveness of German companies,” said Christian Rechtschaffen, the president of the German Association of Grocers.
“We hope that the new tariffs will help to strengthen our competitiveness in the global market.”
The German Federation of Agricultural Trade Unions has already warned that the tariffs would force the German market into a vicious circle, as German companies would not be able to export to Europe, which has the highest demand for food and the lowest demand for goods.
The Federation has said that the trade tariffs would only hurt the German economy, while raising costs for farmers, who would have a hard time selling their products overseas, to import food.
But many analysts argue that the impact on food imports would be negligible.
“Germany imports about 20 percent of the world market and imports a lot of goods.
So it is not a big impact on prices,” Markus Wahlgren, an economist with the German Institute for Economic Research, told the Berliner Zeitung newspaper.
“It’s only the price of German imports that will go up.
We have to think about that,” he added.
A spokesperson for the ministry of commerce, which oversees the German trade and agricultural sector, told The Associated Press on Friday that the government was looking at how to respond to the tariff rise.
“Merkel’s decision to increase the tariffs will have positive consequences for German producers, which have the opportunity to export more, and for consumers, which already have lower prices,” said spokeswoman Andrea Luedeberg.
“Our goal is to support German manufacturers and firms by offering them incentives to export.”
According to the government’s official statistics, Germany exported more than €30 billion worth of goods to China in 2015, the highest number of exports from the EU member state.
The United States, which was the world leader in exports to China last year, followed with a smaller haul of €9.7 billion.
In 2014, Germany was also the biggest importer of U.S. agricultural products, with about €11.4 billion worth shipped to the Chinese market.