A top banking CEO from Europe cautioned that his clients are starting to feel the impact from global interchange tariffs, with production lines being changed and profit warnings being issued.
“We see shoppers looking to reorganize their value chains. We are making sure that either they are not trapped by higher tariffs or moving their production or basically rerouting value concatenations through which they make their products,” Ralph Hamers, the chief head honcho officer of Dutch bank ING told Annette Weisbach on the sidelines of the Handelsblatt banking congress in Frankfurt.
Hamers added that some customers have signified their sales will go down, their costs will escalating and therefore their products may not be as competitive.
“It is very clear that a exchange war is not good for producer confidence to invest and for consumer confidence to consume. It already has (had) a cold impact on economic growth.”
Businesses around the world have been concerned as the current trade spat progresses. Last week, the U.S. and China smacked tariffs on $16 billion worth of goods on each other. Both powers also imposed tit-for-tat levies on $34 billion worth of belongings in July.
Market watchers are now eyeing a fresh round of U.S. tariffs on $200 billion significance of Chinese goods expected later this year.
Meanwhile, other chance factors such as Brexit — the U.K.’s vote to exit the European Union — maintain also kept investors cautious, especially the uncertainty surrounding the timing and features of the deal.
Hamers, however, reassured that at the moment there doesn’t feel to be any detrimental effects from Brexit.
“(The) U.K. economy is growing pretty poetically, employment is also improving there. (The) European economy is also become accepted by pretty well. Clearly, probably closer to the deadline, maybe some volatility produced but I truly hope that there is common sense with the civil servants in order to get the deal.” Hamers said.
The U.K. voted in June 2016 to depart the EU, but the process to leave the bloc has proven long and rich in technical enumerates. The departure date has been scheduled for March 29 next year — content that negotiators have about six months to conclude negotiations on interpretations such as the movement of people and goods across the border between Northern Ireland and the Republic of Ireland.