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Export-reliant central Europe weighs repercussions of Trump tariffs
Published by Global Banking & Finance Review®
Posted on April 3, 2025
3 min readLast updated: January 24, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on April 3, 2025
3 min readLast updated: January 24, 2026
Trump's tariffs pose significant challenges for central Europe's export-driven economies, with potential EU countermeasures and impacts on the automotive sector.
By Jason Hovet and Gergely Szakacs
PRAGUE/BUDAPEST (Reuters) - Leaders in the Czech Republic and Poland signalled a readiness on Thursday to retaliate to new U.S. tariffs, while Hungary blamed Brussels for tensions with Washington, as central Europe began counting the likely costs of a trade war.
Central European countries are among the European Union member states most reliant on trade, with goods exports as a share of output ranging from 76.6% in Slovakia to 39.4% in Poland - all above a 34.2% average for the whole EU.
European Commission President Ursula von der Leyen described U.S. President Donald Trump's universal tariffs as a major blow to the world economy and said the 27-member bloc was prepared to respond with countermeasures if talks with Washington failed.
Trump's announcements sent central Europe's stock markets and currencies to weaker levels, with the Czech crown taking the biggest hit, falling past the key 25 per euro mark in early trade before paring its losses.
"The best tariffs are no tariffs. But there must be two parties who have the will to agree. Europe is prepared to negotiate with the U.S., but at the same time it is prepared to clearly respond," Czech Prime Minister Petr Fiala wrote on social media platform X.
Polish Prime Minister Donald Tusk, whose country's large domestic market and lower reliance on car exports leaves it less exposed than regional peers, said "adequate decisions" were needed on reciprocal tariffs.
Central Europe's trade links are particularly strong in the automotive sector, with the region sending 20% to 30% of its exports to Germany. S&P Global has said the U.S. tariffs could dent growth prospects in central Europe.
While the Czech Republic's direct exposure to U.S. sales is low, its export-oriented car industry could still take a hit, the Czech Automotive Industry Association said last month.
"The announced increase in tariffs will nevertheless have a significant impact on a number of Czech suppliers of parts and services, especially those supplied to German customers, and will thus mean a significant reduction in export opportunities and loss of orders for them," it said.
The tariff hit for Slovakia could be even bigger, Erste Group economists said, putting the combined negative impact at 1.5 percentage points of gross domestic product (GDP) over three years.
"The announced expansion to include all goods subject to tariffs, along with expected reciprocal measures from the EU, could double this negative effect, depending on the scope and strictness of the measures," the analysts said.
Czech bank CSOB also estimated a 1.0-1.5% hit to the Czech economy in 2025-2026 when adding up also the hit to confidence and investor sentiment. German fiscal stimulus could dampen some of the impact from mid-2026, it said.
Foreign Minister Peter Szijjarto of Hungary, whose right-wing, eurosceptic government has forged good ties with the Trump administration, blamed the fallout on EU officials.
"The European economy and ultimately European people are paying for the incompetence of politicians in Brussels," Szijjarto said in a Facebook post.
(Reporting by Jason Hovet and Alan Charlish; Writing by Anna Wlodarczak-Semczuk and Gergely Szakacs; Editing by Gareth Jones)
The article discusses the impact of Trump's tariffs on central Europe's export-reliant economies and potential EU responses.
Countries like the Czech Republic and Poland face economic challenges due to their high reliance on exports, particularly in the automotive sector.
Hungary blames EU officials for the tensions with the U.S., citing the impact on the European economy.
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