Trade war hits German economy hard

The demand for certificates of origin for goods is at record levels: "an unprecedented financial and bureaucratic effort that makes global business increasingly difficult," says DIHK President Schweitzer. He is also worried about the nearby Brexit.

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The German Chamber of Industry and Commerce (DIHK) estimates that the trade conflict between the United States and China is hitting the German economy hard. The trade war spoils the German enterprises above all the export business. "In the current year we will hardly get over the zero line with export growth, so that we have compared to the already weak previous year for more than 30 billion euros less export growth," said DIHK President Eric Schweitzer to the "world".

German companies obtain so-called certificates of origin for their goods at record levels. This allows companies to prove that the goods delivered from Germany to the United States "originate in Germany or in another third country - and not in China", as the DIHK explains. The number of these "birth certificates" rose to 1.43 million in 2018, as the "Welt" reports with reference to the DIHK Foreign Trade Report 2019. The papers would also be used for deliveries from Germany to China. "Here, an IHK certificate of origin can provide proof that the goods were not manufactured in the United States but in Germany or another country.

For German companies, this would result in "unprecedented financial and bureaucratic expenditure, which would make global business increasingly difficult for German companies," Schweitzer told the newspaper. According to Schweitzer, the certificates of origin, which are in demand at record levels, should "act like a kind of anti-customs pill and be able to protect against potential punitive duties". The certificates will be issued by chambers of industry and commerce, among others. According to the DIHK, last year's trend will continue in 2019.

At the same time, the approaching departure of Great Britain from the EU is causing German companies ever greater concern. If the Brexit were to be processed without an orderly transition, "a customs relationship with the United Kingdom could develop overnight, as with Cambodia or Mongolia," warned Schweitzer.

In the ranking of the most important trading partners, the United Kingdom fell to seventh place behind Poland in the first half of 2019 with a volume of 59 billion euros. While German exports to the UK still rose by six per cent in the first quarter compared with the same period of the previous year, a drop of 15 per cent followed in the second quarter.