On the one hand, customs barriers of at least 10% mentioned by Donald Trump. On the other, the continuity of the Inflation Reduction Act (IRA) subsidy regime desired by Kamala Harris. The two candidates are in reality offering two versions of the same protectionism. With varying consequences depending on the country. “When Donald Trump talks about an imbalance, where Europe benefits from trade with the United States, he is addressing Germany in particular,” points out Stéphanie Villers, economic advisor at PwC France and the Maghreb. The German economic model, already losing momentum, could find itself in further difficulty, particularly its automotive sector. Even as trade tensions intensify with the United States and China, “the Germans still believe that the future of their country depends on exports outside the euro zone,” notes Stéphanie Villers.
In turn, France, although less exposed to exports to the United States, would also suffer the impact of the increase in customs duties. Our wine industry, above all, could suffer if the former tenant of the White House decides to introduce customs tariffs on wine, as he did in 2019. Enough to force us to think, as ‘Europeans, to a common commercial policy.
However, in the longer term, Kamala Harris’ plan could have a more destructive effect on the European economy. “It is better that we have customs barriers, which can always be canceled later, rather than an incentive to relocate to American territory. We cannot go backwards on subsidies,” analyzes the economist. And if this aid increases, certain European companies, which until now have resisted the siren call of the IRA in 2022, could ultimately be seduced by lower energy costs across the Atlantic and decide to take advantage of subsidies that Europe does not offer them.
In reality, the “elephant in the room” for our competitiveness is business financing, deplores Stéphanie Villers. An issue that Mario Draghi already raised in his flagship report in September, and which will become all the more crucial in the months to come.