Although the US, Canada and Mexico are working together on the World Cup, US President Donald Trump has announced that he no longer intends to automatically extend the North American Free Trade Agreement (USMCA).
The agreement would therefore remain in force for up to a further ten years, provided none of the member countries withdraws, but it will be reviewed annually. This could lead to months or even years of renegotiations. The US government is also pursuing an increasingly protectionist course with other trading partners: the proposal to impose 25 per cent tariffs on imports from Brazil has already caused outrage, and the current trade agreement with China has not yet been extended either.
Impact on the European Union
Trump also announced that he would increase tariffs on cars and lorries from the European Union to 25 per cent. Should tariffs be raised, Germany would face significant economic consequences for its automotive industry. To avoid a further escalation of the tariff dispute, MEPs in Strasbourg therefore voted by a large majority in mid-June to abolish tariffs on US industrial goods and agreed to the full implementation of a controversial tariff deal with the US.
Meanwhile, Trump slightly reduced tariffs on certain metal and industrial products in order to stimulate short-term investment. As a result, certain countries now face a 15 per cent tariff on mobile industrial equipment such as bulldozers and forklift trucks.
Market observation: Growth in the North American market
The United States is not only hosting the FIFA World Cup; the market there is also becoming increasingly important for project developers and investors in logistics property. This is due to the long-term growth prospects. Recently, several German and international companies have expanded their activities in the United States, including, for example, Garbe, Drees & Sommer and Prologis.
Most recently, the US logistics property provider Prologis has further expanded its operations in the United States. The company, which has branches in Germany, has set up a joint venture with the investor GIC to develop and operate build-to-suit logistics properties in key US markets. The partners cite structural growth in e-commerce, the reshoring of supply chains and robust demand in the North American industrial sector as the reasons behind their decision. The focus is on build-to-suit projects, which the company says have proven to be particularly resilient as they are designed for long-term use and continuously evolving supply chains.
Attractiveness accelerates expansion
Garbe Industrial Real Estate, a developer and manager of logistics, industrial and commercial property, is also banking on growth in the US. Together with Berkeley Investment, a joint venture has been established to drive expansion in the United States. The initial focus is on its industrial and logistics property businesses, residential projects and life sciences properties in the Boston area. The aim is to capitalise on the dynamic growth opportunities in selected US markets.
Last year, Drees & Sommer expanded its position in the North American market through the acquisition of the US project management firm VVA. This move enables the consultancy, planning and project management firm to strengthen its range of services by drawing on VVA’s local expertise.
These various expansions highlight the attractiveness of the US market for logistics and industrial property. Joint ventures accelerate market entry for external companies and offer faster access to growth opportunities. They are also a positive sign of global cooperation.
