Even before Donald Trump entered the White House, it was clear that the new US administration would burden trade with the United States with new tariffs. Even at the end of February, their exact form was not clear. But even on Monday, the US President reiterated that the introduction of tariffs on Canada and Mexico is going according to plan. On the second of April, the White House is due to come up with a comprehensive proposal for reciprocal tariffs that will hit any country that imposes barriers on US exports.
Dangers for the automotive industry
Reciprocal tariffs would increase tariffs for EU firms by thirteen percentage points, according to a study by Allianz Trade. The company’s analysis considered not only direct tariffs on US imports, but also taxes such as value-added tax (VAT), import quotas and other requirements. While these tariffs would affect all exporters, the US president is also planning more – sectoral tariffs. These would cover imports of cars, semiconductors and pharmaceuticals at a rate of around 25 per cent. They would be an extension of the tariffs currently imposed on steel and aluminium imports. Europe, and Slovakia in particular, would be most affected by tariffs on cars.
The United States of America is geographically distant, but from the export point of view it is critical for Slovakia. It is the fourth largest export destination. Slovak companies export more only within supply chains to Germany, the Czech Republic and Hungary. Almost six percent of Slovak exports end up in the USA. As a proportion of GDP, it was up to 4.6 percent of GDP in 2023. As much as 71 percent is made up of automobiles and another nearly five percent of tires. With the introduction of reciprocal tariffs of thirteen per cent plus sectoral tariffs on cars of 25 per cent, it is likely that Slovak automotive exports to the US would collapse.
USA patria k tradičným partnerom Slovenska najmä v oblasti automobilového priemyslu, ale evidujeme aj výrobcov v sektore výroby umelých vlákien či výroby neželezných kovov. Pre Slovensko ako krajinu s malým, ale otvoreným hospodárstvom to môže mať významné následky. „Zavedením možných ochranárskych opatrení USA voči európskym výrobcom clo môže výrazne ovplyvniť export Slovenska do USA. Čísla si netrúfam ani len odhadnúť. Dúfam, že EÚ vyrokuje nezavedenie ciel v čo najširšom rozsahu,“ povedal riaditeľ oddelenia obchodovateľného rizika Eximbanky SR Martin Schaner.
“We are seriously concerned because our industry is already losing its breath in terms of global competitiveness and new tariffs and restrictions could have disastrous consequences. We have members who also have investments on the North American continent, and they are also vitally concerned. Competent people should urgently look for effective solutions to respond to these challenges, or relieve entrepreneurs in other areas, so that the eventual impacts are smaller and do not threaten the existence of Slovak exporters,” said Lukáš Parízek, Chairman of the Council of Slovak Exporters.
Linking politics and economics
This is also the reason why they attended the CPAC conference together with the Slovak delegation led by Prime Minister Robert Fico. “The interconnection between politics and economics has taken on an absolute dimension in the United States, which is why it is necessary to communicate as soon as possible, to clarify mutual positions and opinions. Our exporters are nervous, they need up-to-date information and open channels of communication,” said Mr. Parizek.
In addition to direct exporters to the USA, which are mainly multinational automotive chains, Slovak companies from third countries also export to the USA. Eximbanka SR also helps them in this. “We register exporters with production in Canada with the intention to place part of it on the American market. Despite the 30-day delay, it can be assumed that these tariffs will significantly affect the further development of exports,” added M. Schaner.