Slovakia fears consequences of US tariffs on European automotive production

Being the EU’s leading car and car exporter to the United States, Slovakia expressed its deep concern and fear over the knock-out effect of US tariffs on imported cars from the European Union.

Slovakia is known to contribute a lion share to the overall car making sector – 44 per cent of total industrial production and 35 per cent of exports. Last year, 1,001,520 cars rolled off assembly lines in Slovakia and exports were worth 3.7 billion euros.

“The ratio of overseas car exports to Slovakia’s GDP is significantly the highest among all countries of the EU, at up to 1.7 per cent,” said the Slovak Institute for Financial Policy (IFP) in a study.

According to IMF, the automotive tariffs, if come into effect, could hard-hit Slovakia approximately 90 million euros.

Martin Vlachynsky, an analyst at the Institute of Economic and Social Studies (INESS), however, gave a different viewpoint. He told Emerging Europe that the direct effects would be probably not very intensive, at least in the short term. The analysts from the Ministry of Finance calculated the worst case scenario as 0.11 per cent of GDP.

Mr. Vlachynsky added, “The majority of our exports go to our nearest neighbours. Obviously, being one of the most open economies in the world, any further escalation would result in bigger economic loss, especially if our other partners were affected.”

Slovak Economy Minister Peter Ziga said that Bratislava would rally for unity across the European Union in the interest to keep the automotive industry tariff-free.