MF: EU-USA Agreement Expected to Reduce Czech GDP Growth by 0.2 Points This Year

Prague – The EU-US trade agreement, which imposes a flat 15 percent tariff, is projected by the Ministry of Finance (MF) to slow the Czech economy’s growth by 0.2 percentage points this year and 0.39 points in 2026. The MF shared this information with CTK, noting that these estimates do not necessarily mean a decrease in the growth of Czech GDP.

According to the MF, the adverse effects of the tariffs may be offset by other factors, such as ongoing positive trends in the Czech economy or the anticipated benefits of Germany’s fiscal package in 2026. The tariffs will be effective starting Friday, August 1, 2025.

The trade agreement, which was announced on Sunday by European Commission President Ursula von der Leyen and US President Donald Trump, establishes a flat 15 percent tariff on most imports from the EU to the USA. Certain products, including steel and aluminum, will still face a 50 percent import tariff, while selected chemicals, pharmaceuticals, and critical raw materials will be completely exempt from tariffs.

The Ministry of Finance is preparing its macroeconomic forecast for August, set to be released on Thursday, August 21. “This will incorporate the 15 percent tariffs; however, because we do not yet have a complete list of items exempt from tariffs, this estimate may change before publication,” the ministry indicated.

In its April forecast, the MF anticipated a 2 percent economic growth this year, following a 1.1 percent increase last year. This outlook has been revised down by 0.3 percentage points since January, largely due to the effects of US tariffs on automobiles, steel, and aluminum. The forecast also considered sector-specific tariffs and the 10 percent general tariffs imposed by the USA on many countries.

However, it did not factor in the 20 percent general tariff against the EU, which Trump announced in early April but later delayed for 90 days. Had the 20 percent tariffs been implemented, the MF’s April forecast suggested that the Czech GDP would have risen by 1.6 percent this year. (July 29)