German confectionery association criticises government and EU as US tariffs extended to sweet pastry manufacturers
From September 1, 2020, a new list of US punitive tariffs on products that are exported from Germany to the US came into force and now applies to German sweet pastry manufacturers.
The tariff on baked goods was introduced after the World Trade Organization approved US plans to impose $7.5bn in tariffs on EU goods annually to counteract years of European loans and illegal subsidies to aircraft manufacturer Airbus.
An existing 25% US tariff prior to September 1 on German confectionery has already hit the industry hard, said the BDSI.
The current foreign trade figures make it clear that the US punitive tariffs that have been imposed since October 18, 2019, are placing an enormous strain on German manufacturers of sweet pastries and wafer products, it said.
Companies affected by the US punitive tariffs lost a total of 30% of their exports in volume and value in the first half of 2020, compared to the same period of the previous year.
The BDSI claims the situation will worsen over the course of the year, because exports to the US usually make up approximately 75% annually - with the bulk coming in the second half of the year.
"The medium-sized, predominantly family-run companies have lost an essential market overnight and through no fault of their own, which they have painstakingly built up and developed over decades," said Andreas Nickenig, chairman of the fine baked goods division (BDSI).
According to the BDSI, the continuation of the punitive tariffs jeopardizes the longstanding commitment of German confectionery manufacturers in the USA and can also lead to significant job losses in Germany.
Until the imposition of punitive tariffs on biscuits and waffles, the US was by far the most important export country for German biscuit manufacturers and confectionery companies outside the EU.
To make matter worse, the United Kingdom has been exempted from the confectionery and pastry tariffs, and the BDSI said it is “disappointed with German and European politics”.
The BDSI claims its government is focusing on industrial goods, whereas France and Italy have made much stronger efforts in their food sector, and the United Kingdom has had punitive tariffs for fine baked goods lifted completely from the list of affected products.
The establishment of a European compensation fund for uninvolved industries in WTO proceedings, as recently proposed by the Foundation of Family Businesses, could provide temporary help for German companies, which are already badly affected by the coronavirus crisis, the BDSI acknowledged.