The USA’s president, Donald Trump, has created a new economic reality with his trade war, which also affects countries that considered themselves Trump’s friends.
All EU countries have been imposed a 15 percent tariff on exports of goods to the USA.
This will take effect on Thursday, and it has already caused economic damage and uncertain conditions.
Even in a country like Hungary, which had high expectations of the president before Trump’s trade war, which he initiated in April.
Hungary’s Prime Minister, Viktor Orbán, had promised that “his dear friend” Donald Trump’s return to the White House heralded a new “golden age.”
The tune has changed, as Trump’s tariffs hit the Hungarian automotive industry hard.
Car orders have been canceled, and now there are changes in the workflow at the factories.
This is what union representative Zoltan Laszlo, who represents workers at the Mexican car factory Nemak in Hungary, told Reuters.
In recent years, Hungary and its neighbor Slovakia have become production centers for large international car brands, including British Jaguar and Land Rover, German Mercedes, and Japanese Suzuki.
Slovakia’s Prime Minister, Robert Fico, has also expressed great enthusiasm for Trump. He has praised the president for his efforts in the peace negotiations between Ukraine and Russia.
Before Trump became president, the tariff on car imports from the EU to the USA was 2.5 percent. Shortly after his inauguration, Trump raised it to 25 percent, and later it was lowered to 15 percent.
This tariff slalom has caused chaos, says Zoltan Laszlo.
The automotive industry in Hungary and Slovakia relies on importing spare parts and exporting finished cars. Therefore, it is among the hardest hit by the tariff in the EU.
The Hungarian economist Matej Hornak estimates that the tariff will result in a decline in exports of several hundred million euros and a decrease of 10,000-12,000 jobs in the automotive sector in Hungary.
After the new tariff rates against the EU were announced, Orbán was quick to blame the President of the European Commission, Ursula von der Leyen, for not negotiating a better deal.
Trump “had her for breakfast,” Orbán said about the American president’s meeting with von der Leyen at one of Trump’s golf resorts in Scotland.
German Volkswagen, which is one of the largest employers in Hungary, produces cars in Gyor. These cars are produced for the American market.
In addition to the higher tariff, Trump’s inauguration has far from created a new golden age for Hungary, as Orbán had promised.
The Hungarian government had set a growth target for the economy of 3.4 percent. It has now been downgraded to 1 percent.
/ritzau/
