President Donald Trump has reshaped the economic landscape through his trade war, impacting even nations that have been allies.
All EU member states are facing a 15 percent tariff on their exports to the United States.
This new regulation will come into force on Thursday, already leading to economic setbacks and instabilities.
In Hungary, a nation that had high hopes for Trump before the trade war commenced in April, the situation has changed dramatically.
Prime Minister Viktor Orbán had anticipated that Trump’s return to the presidency would signal a new “golden age” for Hungary.
However, the reality shifted as Trump’s tariffs severely affected Hungary’s automotive sector.
There have been order cancellations and modifications in manufacturing processes, according to union representative Zoltan Laszlo, who works with employees at the Nemak car factory in Hungary.
In recent years, Hungary and Slovakia have developed into key production hubs for major international automobile brands, such as British Jaguar and Land Rover, German Mercedes, and Japanese Suzuki.
Slovakia’s Prime Minister, Robert Fico, has also shown strong support for Trump, commending him for his role in peace talks between Ukraine and Russia.
Prior to Trump’s presidency, the tariff on EU car imports to the US was 2.5 percent but was raised to 25 percent shortly after he took office, before being adjusted down to 15 percent.
This back-and-forth on tariffs has created confusion, as stated by Zoltan Laszlo.
The automotive sectors in Hungary and Slovakia depend heavily on the import of components and the export of completed vehicles, making them some of the most affected by these tariffs in the EU.
Hungarian economist Matej Hornak estimates these tariffs could lead to an export drop of several hundred million euros and a loss of 10,000-12,000 jobs in Hungary’s automotive industry.
Following the announcement of the new tariffs, Orbán quickly placed blame on European Commission President Ursula von der Leyen for failing to secure a more favorable agreement.
Orbán remarked that Trump had “her for breakfast” during one of his meetings with von der Leyen at a golf resort in Scotland.
German automaker Volkswagen, one of Hungary’s largest employers, produces vehicles in Gyor specifically for the American market.
Alongside the heightened tariffs, Trump’s administration has not ushered in the “golden age” that Orbán had predicted for Hungary.
The Hungarian government had initially aimed for a 3.4 percent economic growth but has since revised expectations down to 1 percent.
/ritzau/
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