Global trade war hits Dutch technology industry hard

The global trade war is sowing uncertainty among technology companies: investments on the brakes, exports in the minus. A survey by FME shows that as many as 60% of the nearly 250 companies surveyed are affected by U.S. import tariffs and countermeasures taken. In addition, 56% of the companies expect to postpone investments. Among exporters to the US, nearly half foresee a sharp decline in sales, by an average of 43%. This puts further pressure on the technology industry, on top of existing challenges such as high energy prices, regulatory pressure and a deteriorating investment climate.

Theo Henrar, chairman FME: "If the trade war continues, our industry expects postponement of investments, a decline in exports and increasing disruptions in the chain. Without swift action, the Netherlands risks major economic damage."

Impact on investments

The global trade war is inhibiting willingness to invest. As many as 56% of companies expect to postpone investment if tensions persist, mainly due to demand outages from the U.S. and the lack of stability in the global market. "Entrepreneurs need confidence and predictability to invest. When that is lacking, the brakes are put on. Postponing investments sounds innocent, but ultimately brings the whole chain to a standstill - from supplier to end customer," stated FME president Theo Henrar.

Anticipated issues surrounding international trade

The global trade war directly affects technology value chains. Business owners mainly expect a decline in exports and uncertainty about agreed purchase prices. Among companies exporting to the U.S., almost half foresee a decrease in sales, on average by 43%. At the same time, concerns are growing about dumping of cheap products from China on the European market.

Unclear rules

For the vast majority, the rules are unclear. Entrepreneurs especially experience ambiguity due to the ongoing changes in U.S. policy around import duties and rules of origin.

Action by government necessary

FME believes that the Netherlands should make a strong case at EU level to get the measures off the table through negotiations and, if necessary, decisively use trade defense instruments to protect the industry. "After 100 days of Trump, we see that uncertainty forces companies to postpone investments. The Netherlands and the EU must not allow themselves to be lulled to sleep. We must act now: negotiate where possible, protect where necessary, and conclude new trade agreements," Henrar said.

The survey was prepared in cooperation with FME partner industries NEVAT, FPT-VIMAG, ESNL, Fedet, Binnenklimaat Nederland and (Vereniging) Distributie en Afgifte Industrie.