Trump's import tariffs will have limited impact on Netherlands: CPB

The import tariffs that the incoming American president Donald Trump wants to implement will only have limited consequences for the Netherlands. According to the Bureau for Economic Policy Analysis (CPB), only 4 to 5 percent of Dutch exports go to the United States. The CPB states that the levies will cause Dutch trade to fall by approximately 1 percent.

According to the bureau, the effect of the import tariffs is greater for some exports in the Netherlands because they export relatively more to the U.S. For example, the production of machines and equipment (-6 percent), electronic and optical products (-5.7 percent), and vehicles (-5.3 percent) will decrease more, the CPB said.

On the other hand, Dutch service providers in telecommunications, aviation, and rental and leasing of machines will benefit because American services are becoming more expensive. According to the CPB, the production of these services will increase by around 3 percent, although there will be adjustment costs in the short term, including investments in capacity.

The bureau also stated that the American levies will stimulate production in the U.S. itself of vehicles and electrical equipment, for example, because less will be imported from abroad. However, consumer prices in the U.S. will rise due to the more expensive import of other consumer goods. American companies will also have to deal with more expensive import of materials, worsening their competitive position.

The CPB also looked at possible retaliatory actions in which the European Union imposes its own levies on American products. According to the agency, there will then be small additional decreases in imports and exports in the Netherlands and Europe. European countries will then also trade more with countries elsewhere in the world.