The administration of US President-elect Donald Trump continues its policy of protecting the domestic market, which is likely to be reflected in the introduction of high tariffs on European goods. This move is clearly aimed at ensuring that competition from foreign producers in the US market is reduced. For Slovakia as a country with a small but open economy, this may have significant implications, especially for the automotive industry, which is one of the key pillars of Slovak exports. Automakers that are heavily dependent on the US market (such as Volkswagen) will face significant challenges. However, in terms of the structure of Slovak exports, the overall impact may not appear as dramatic as for European countries, for example, which have significantly higher exposure to the United States.
Alternatives to our exports
The Slovak government was therefore right to respond already in the government’s programme statement by seeking alternative markets. The focus on regions such as Central and South-East Asia, the Balkans, the Caucasus and Africa represents a pragmatic step that can bring more stable foreign trade relations for Slovakia in the long term. These regions, often characterised by a dynamically growing economy and a lower likelihood of protectionist measures against the EU, offer promising opportunities for Slovak exporters in many areas and sectors. A more significant diversification of export markets can be a positive step for Slovakia not only in the context of the current geopolitical tensions, but also in the long term.
Chances of success
Reducing dependence on traditional markets such as the US and strengthening trade relations in other parts of the world can provide Slovak companies with greater stability and growth potential. It is great that the Slovak government supports entrepreneurs in entering these new markets – through Eximbank in the form of export financing and insurance mechanisms, and the role of Slovak economic diplomacy also plays a significant role here. Such an approach could be beneficial in mitigating the risks associated with expansion into lesser-known regions and increase the chances of success for Slovak exporters. While changes on the global stage bring ever greater challenges, they also open up new business opportunities. It is up to Slovakia and Slovak exporters to use them effectively.
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Photo source: Peter Majer, Hospodárske noviny