Trump tariffs split EU as Hungary seeks exemption

Hungary has broken ranks with the EU in response to the US’s new tariffs policy, as Hungarian Prime Minister Viktor Orban seeks to preserve close ties with the Trump administration amid the resultant trade tensions.

Hungary pushes back on retaliatory tariffs

The EU confirmed on 9 April that it would impose retaliatory tariffs on over USD 23bn of US goods, including soybeans, motorcycles, meat, textiles and ice cream, in response to the latest duties announced by US President Donald Trump.

The US measures, on which Trump has repeatedly flip-flopped, would include a 25% tariff on EU steel and aluminium and a 20% duty on a wide range of manufactured and agricultural goods, under what the maverick US president has described as a strategy to reverse trade imbalances and protect US industry.

Hungary was the only EU member state to vote against the bloc’s response. Hungarian Foreign Minister Peter Szijjarto said countermeasures would raise prices across Europe and urged instead for renewed negotiations with the US. Orban said he expected the trade conflict to ease within months, adding that it was a “tactical dispute” and that a “tariff peace” was likely. He added that attention should focus on more pressing issues such as Ukraine’s potential EU membership, which he said could have long-term implications for Hungary.

Hungary’s dissent reflects its broader strategy of cultivating a bilateral relationship with the US, which began in earnest when Orban backed Trump’s election campaign in 2016. Orban’s government has proposed an economic cooperation package to limit the impact of US tariffs and revive a terminated tax treaty, with talks with the US reportedly ongoing.

Hungary exposed to Trump policy shifts

However, Hungary is vulnerable. The proposed US tariffs could hit key Hungarian export sectors including automotive, electronics and food, where companies such as Audi, Mercedes and other multinationals have significant operations. A 25% tariff on vehicles and machinery would hurt Hungary, where car production is a key economic pillar.

Hungarian exports to the US total around USD 9bn annually and US lawmakers have floated tariffs as high as 500% for countries that purchase Russian oil, gas and uranium. Hungary, which relies on Russia for over 80% of its oil imports and a substantial portion of its natural gas, is among the nations that could be severely affected. ​In response, Hungary is exploring alternative strategies, with one option being the diversification of its energy sources.

The US Trade Representative has also cited corruption in Hungary’s public procurement system as justification for new tariffs against the EU as a whole.

Hungary has responded to Trump’s tariffs policy by strengthening ties with China, UK daily The Financial Times wrote. Chinese firms such as BYD and CATL are building factories in Hungary, particularly in electric vehicle and battery production. These investments are part of the government’s strategy to reduce reliance on EU development funds, which have been withheld over rule of law concerns.

Although Orban has framed the trade dispute with the US as a temporary disruption, Hungary’s break with the EU on tariffs could underline a deeper realignment, as it backs bilateral deals over bloc-wide solidarity.