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Tariffs

Tariffs Nightmare: EU Exporters Struggle to Meet Alarming US Steel Derivative Tariffs

Strategic Insights

— 2 min read

US President Donald Trump's imposition of tariffs on 407 specific products has sent shockwaves through the EU, with companies such as Krone, a leading farm machinery manufacturer, forced to pause exports to the US. The new tariffs, which fall outside the EU-US deal struck in July, have created a bureaucratic nightmare for exporters, who must now provide unprecedented levels of detail to certify the origin, weight, and value of any steel in their products. Krone, which has 10,000 employees and exports $130m worth of goods to the US each year, has been severely impacted, with its head, Bernard Krone, describing the situation as "alarming" and the EU-US deal as "not worth the paper it is written on".

Key Takeaways:

  • The US has imposed tariffs on 407 specific products, including combine harvesters, hair curling tongs, and bridge and railway structures, under the steel derivatives list, which was published on 18 August.
  • Exporters such as Krone must now provide granular data, including country of melt and pour (steel) and country of primary smelt and cast (aluminum), to certify the value and origin of any element of steel in their products.
  • Krone, which has 10,000 employees and exports $130m worth of goods to the US each year, has been severely impacted, with its head, Bernard Krone, describing the situation as "alarming" and the EU-US deal as "not worth the paper it is written on".
  • The new tariffs have created a bureaucratic nightmare for exporters, who must now provide unprecedented levels of detail to customs border authorities, with incorrect paperwork potentially resulting in 200% tariffs on Russian imports.
  • Bernard Krone has spent seven weeks addressing the new issue, pausing exports to the US, temporarily suspending production on some lines, and extended holidays for his workers by two weeks.
  • Flexport, a US logistics and freight company, has advised customs authorities to apply the 200% tariffs on Russian imports to any steel derivative product on the hitlist with "incorrect" paperwork, withholding refunds until paperwork is in order.

Statistics:

  • 407: the number of specific products on the US steel derivatives list.
  • $130m: the annual worth of goods exported to the US by Krone.
  • 10,000: the number of employees at Krone.
  • 18,000: the number of parts in a super-machine farming some of the world's biggest farms.
  • 15%: the blanket tariff agreed by the EU.
  • 200%: the tariffs that may be applied to Russian imports with incorrect paperwork.
  • 18 August: the date the US steel derivatives list was published.

Sources:

  • The Guardian
  • VDMA (German engineering federation)
  • Krone
  • Flexport
  • EU Trade Commissioner MaroÅ¡ Sefcovic

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