CEE auto, steel at sharp end of Trump tariffs

US President Donald Trump’s new raft of global tariffs threatens to hammer the export-driven economies of Central and Eastern Europe (CEE), with his 25% duty on foreign-made cars posing a direct risk to regional manufacturing.

As highly integrated suppliers in Germany-led EU value chains, Slovakia, Hungary and Czechia are among the most exposed economies, and analysts predict steep drops in GDP and exports.

Car tariffs strike CEE’s industrial engine

Trump’s new auto tariff, effective 5 April, targets all foreign-made cars. He called the measure the “rebirth of American industry” and tariff the “most beautiful word in the dictionary”.

The US president has long complained about US automotive exports: the EU collects a 10% duty on vehicle imports, 4 times the US’s tariff rate. “We have a deficit of USD 350bn. They don’t take our cars,” Trump told reporters.

The move is a particular blow to CEE, where car production underpins entire economies. Vehicles make up nearly 10% of global trade, and the EU is the largest exporter, with USD 300bn annually and a 25% global share (excluding intra-EU trade).

While Hungary exports 12.6% of its vehicles directly to the US, most CEE-made cars are shipped via Germany. A tariff hit to German brands will ripple through the region’s supply chains. Slovakia exported USD 6.3bn worth of cars to the US in 2024 – more than Italy or China. Hungary exported USD 1.75bn, exceeding Belgium and France

CEE’s role in the EU–US trade gap is clear. The EU exported 5.4mn cars in 2024, worth EUR 89.3bn more than it imported. The US accounted for 757,654 of those vehicles, worth EUR 38.9bn. Only 133,321 US cars were shipped to Europe.

According to World’s Top Exports, the US imported USD 219.5bn worth of cars globally in 2024, but only earned USD 59.2bn from car exports — a USD 160.3bn deficit, with CEE countries contributing to this gap. Germany had a USD 17.7bn car export surplus with the US in 2024, Slovakia USD 6.3bn and Hungary USD 1.75bn.

Trump aims to shrink this gap. However, analysts are warning of the consequences. The Anderson Economic Group estimates the tariff could raise US vehicle prices by between USD 3,500 and 12,000. The Vienna Institute for International Economic Studies (WiiW) projects EU car exports to the US will fall by USD 8bn, cutting the EU’s GDP by USD 9bn. Slovakia is forecast to see a 1% export drop, and Hungary, Czechia and Austria also face losses, as do Germany and Sweden.

Steel sector in the crosshairs

The 25% tariff on steel that Trump introduced in February remains in place. The EU last year recorded a EUR 4.7bn trade surplus in iron and steel with the US, with exports totalling EUR 5.4bn, up 51.1% from 2019. Exports of steel articles reached EUR 8bn, up 45.1%.

The countries most exposed to the renewed steel tariffs include CEE’s Poland, Slovakia, Czechia and Romania, as well as Germany, which alone produces 28.1% of EU steel, although per capita sectoral employment is higher in Slovakia, Czechia and Romania. The steel industry employs 22,000 Romanians, 21,500 Poles, 17,000 Czechs and 11,000 Slovaks. EU-wide, the industry supports 303,000 workers and produces 140mn tonnes of steel annually.

Trade tensions return

The US–EU trade standoff is nothing new. Trump’s first term saw US tariffs on EU steel and aluminium and EU counter-tariffs on USD 2.8bn of US goods. Disputes over Boeing subsidies followed.

A 2021 truce paused those tariffs. Now tensions are back. Trump declared 2 April as “Liberation Day” and said the new tariffs mark when the US will “start taking money in” to contribute to “the reconstruction of our country”.

This week a general 10% import tariff also hits countries including the UK, Turkey and Saudi Arabia. The EU faces a 20% rate. Trump also introduced a tier of “reciprocal tariffs” against what he calls the “worst offenders”. China is hit with 34%, or 54% including existing tariffs. Trump claims the EU imposes an effective 39% burden on US goods once regulatory barriers and currency effects are included. Trump also cited Switzerland’s effective rate at 61%.

European Commission President Ursula von der Leyen this week called the new tariffs a “major blow to the world economy”, adding that the EU would take “firm countermeasures” and urging members to strengthen the single market to absorb the shock.

The stakes are high in CEE: under pressure from China’s electric vehicle push, weak global demand, and green transition, the new US tariffs pile fresh pressure on already fragile industrial models.

Trump has wielded tariffs not merely as economic instruments but as political weapons, frequently announcing and withdrawing them in response to international developments. While some view this strategy as a tactical manoeuvre, the risks for CEE economies are both real and immediate.