Nevi Dutch Manufacturing PMI fell slightly
The Nevi Dutch Manufacturing PMI fell slightly, from 50.0 in February to 49.6 in March. After a small increase in the previous month, the number of new orders fell again, but only to a very small extent. At the same time, the Dutch manufacturing industry did increase production for the first time in nine months. However, there is no sign of a strong recovery yet.
Trump goes further than in his first term
In the meantime, the industry is under the spell of geopolitical developments. Three weeks ago, United States (US) President Donald Trump introduced import duties of 25 percent on all steel and aluminum. In 2023, the Netherlands exported around one and a half billion euros worth of steel and aluminium to the US. Industrial entrepreneurs remain optimistic, but optimism about production in the next twelve months has waned, according to the Nevi survey, and is lower than the long-term average.
The March survey had already ended when Trump announced tariffs of 25 percent on all cars and auto parts on Wednesday, March 26. This could put pressure on European exports. Germany is the largest car exporter in Europe, and is the most important export market for Dutch industrial companies, including those that make car parts. In 2024, Germany exported 3.4 million new cars, accounting for an export value of 135 billion euros. The US imported 13 percent of that, making it the largest export market for German cars. German car exports to the US account for about 1 percent of total German exports.
Dutch industrial sectors that supply parts to the European automotive industry include the chemical industry, the rubber and plastic products industry, the basic metal industry, the metal products industry and the electrical engineering industry. Dutch exports, especially to Germany, may therefore come under pressure as a result of the American import duties on cars. The import duties on cars will take effect on April 3, according to the US. Import duties must also come into force on all kinds of car parts by May 3 at the latest. The import tariffs are a shock to the globally highly integrated car industry, which is connected by a global network of suppliers that often supply multiple manufacturers. If Trump actually executes his plans, it means that he will go further than in his first term, when he only threatened to slap import duties on cars.
Germans pull out wallet
Better news came in recent weeks from Germany, which wants to invest hundreds of billions in infrastructure and defence in the coming years. It is expected that it will take until the end of 2026 before European production really gets going due to all kinds of procedures and licensing. In the long run, however, this is a boost for Dutch industry, which can supply the German construction and defense industry. The new German coalition partners SPD and CDU/CSU also want to support the chemical and steel industry.
Dutch support for industry?
This changes the playing field for the Dutch energy-intensive industry, which pays higher grid tariffs than industry in surrounding countries and also receives less compensation. These network tariffs are in addition to the costs for the energy itself, which is significantly more expensive in Europe than in other parts of the world. These higher costs have consequences for the competitive position of the industry in Europe and specifically in the Netherlands. In March, two chemical plants in Rotterdam announced closure, Shell is considering closing all its chemical plants in Europe. A proposal by D66 to invest 3 billion euros of taxpayers' money annually in the electricity grid is supported by a majority of the House of Representatives, including coalition partner VVD. It is therefore quite possible that the government will already release billions in the Spring Memorandum, which must be ready in June, to reduce costs for industrial companies, among others. The national CO2 tax will be maintained.