Hello and welcome to the CR podcast. My name is Jake Echaki and I'm a senior research fellow at the CR

and I will be your host today.

We will be discussing Trump's tariffs and the potential shock Germany's economy is facing

from China's aggressive export-led growth.

I think with the U.S. presidential inauguration just behind us and the German elections just ahead

of us, this is a good time to take stock and look at the broader threats

Europe's economies facing. So my guest today to discuss this is Sandra Thoradar, the CER's chief

economist. Sander, welcome to the podcast. Thank you. Glad to be here. So let's start with

Trump's tariffs. We are recording the podcast on Monday afternoon, two days after Trump announced tariffs on

Canada, Mexico and China. What are the implications and what does this mean for the EU-China trade

relationship? Yeah, it's been really quite a flurry of tariff action from the US. I think it is

unequivocally clear that it sends a signal to the EU because the kind

of tariffing of Mexico and Canada, whilst having been mentioned during the election campaign,

wasn't really on anybody's bingo card as the key priority for the Trump administration. And in fact,

it is also profoundly damaging to the US itself more so to Canada and

Mexico but also to the US itself if you look at you know all sorts of industrial value

chains that run through North America there will be knock-on effects for example on

Detroit car makers that source parts from Canada and Mexico.

And some of these parts travel across these borders several times.

So imagine if you have to pay a tariff every time it crosses the border, it will add significantly to the costs that these carmakers are facing.

And it sends a political signal to the Europeans that even allies may be not necessarily also a target along China.

They may even be the prime target. And so we seem to be in a different world than the world

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