Trump's trade war on gingerbread | DW News

Key Concepts:

• Trade war impact on German cookie manufacturer Lambits
• 15% tariff imposed by the US on imported goods
• Pre-sold goods and fixed prices
• Export dependence (25% of Lambits' production)
• Rising costs of raw materials (butter, eggs, cocoa, nuts, chocolate)
• Energy costs for baking and cooling
• Impact on profit margins

Impact of US Tariffs on Lambits' Exports

The core issue discussed is the impact of a 15% tariff imposed by the US on imported goods, specifically affecting the German cookie manufacturer Lambits. The company ships a significant quantity of Christmas treats to the US annually, and these goods are currently in transit. The tariff creates a financial burden, raising the question of who will bear the additional cost.

Pre-Sold Goods and Fixed Prices

Lambits has already pre-sold a large portion of its products destined for export to supermarket chains in the US. These sales were agreed upon at specific prices. The 15% tariff adds an unexpected cost, potentially eroding profit margins since the prices are already fixed. The manufacturer is faced with the challenge of absorbing the tariff or renegotiating prices, which could be difficult given the existing agreements.

Export Dependence and Production Volume

The Lambits group, based in Aachen, exports approximately 25% of its total production. This highlights the company's reliance on international markets, particularly the US. With a substantial portion of their goods heading to the US, the tariff has a significant impact on their overall business.

Rising Production Costs

The video emphasizes the increasing costs of essential raw materials. Butter, eggs, cocoa, and nuts have become considerably more expensive in recent months. Specifically, the price of chocolate has "enorm explodiert" (exploded), significantly impacting production costs.

Energy Costs

The production process requires substantial energy for baking and cooling the products. The company needs gas to bake the products and energy to cool them in the cooling channel. These energy costs, combined with the rising raw material prices, further squeeze profit margins.

Conclusion

The trade war and the resulting 15% tariff imposed by the US present a significant challenge for Lambits. The company faces the dilemma of absorbing the tariff costs, renegotiating prices with customers, or potentially reducing production. The rising costs of raw materials and energy exacerbate the situation, making it difficult for the company to maintain profitability. The video highlights the real-world impact of trade policies on businesses and the complexities of international trade.