Should we prepare for worse times? US President Donald Trump (72) is more outraged at the fact that, in addition to increasing steel and aluminum tariffs, he will also come up with more radical solutions.
He recently stated that he has already decided to introduce up to 25% of the import tariff for cars from the European Union. It is simply the country that exports most cars to the US. What are the risks for us after this step?
Recently, Americans have argued that the introduction of import tariffs for cars will be decided longer. Originally they negotiated rationally with various car manufacturers from other continents. Everything troubled Trump's sudden announcement by Trump during a meeting with his supporters. "We will introduce 25% excise duty for every car that comes to the US from the European Union," said CNBC. It is a tribute to this movement to stimulate the domestic economy. According to statistics, Slovakia will achieve the planned increase in car fares much more. Export to the US in the case of our economy, most cars are made – up to two thirds of all goods.
In terms of GDP, this is the most of the EU. The Finance Policy Institute of the Ministry of Finance calculated that the damage to the 20% target would amount to at least EUR 100 million, at 25% it would be even higher. "Business wars are harmful to both US consumers and European employees. Customs now applies the US at 2.5% and the US at American cars at 10%, "said Radovan Ďurana of INESS.
Problems come forward
The biggest problem will be in Slovakia, Volkswagen and Jaguar, which focus on the sale of cars on the foreign market. The race in Bratislava exported 99.7% of cars from Slovakia, with the most leading to Germany and a fifth to the US. Similar plans for the export of luxury cars are also the soon to be opened Jaguar Land Rover. The European Commission does not yet comment on Trump's speech. At the end of July, the American president agreed with the CEO of the European Commission, J. Juncker, that they would remove trade barriers.
"Since then, several meetings have been held to reach a mutually agreed action plan, some even this week," he told the Commission's New Time source. The General Secretary of the Automotive Industry Association, Jan Pribula, explains that it is possible to talk about both direct and indirect effects. "Directly, the demand for models produced in Slovakia and Slovakia is decreasing as long as the demand for models is reduced by suppliers in Slovakia," says Pribula.
Analyst Stanislav Panis of J & T Bank explains that Trump's statement is unfortunate and came as part of the pre-election campaign for the congress in the fall. "These were the rather irrelevant words that Donald Trump knows and maybe should take back" he concluded. The Ministry of Economic Affairs explains that this information is surprising. "These measures are bad news for world trade and a further contribution to the unnecessary spiral of protection measures." For countries like Germany and Slovakia, the automotive industry is a strategic part of the economy and therefore our opinions are likely to be close, "said Maroš Stano. , spokesperson for the car industry.
New barriers between the US and the EU
Martin Vlachynský, economic analyst INESS
I am afraid that this attitude of the US in business relationships, which is always on a roller coaster, can help escalate relations and create additional barriers between the US and the EU. Production will be more diversified in the future for those less luxurious types. Slovakia is too small a economy to have a broad-spectrum successful production, in this respect I do not consider the automotive industry to be an obstacle, even if the question is whether these companies should be supported by the government.
American cars can be sold at home and in Asia
Boris Tomchiak, analyst Finlord
This will mainly be influenced by the VW of Bratislava, as it targets up to 20% of its production, in particular the SUV and Porsche. Our economy is only slightly affected, it is assumed that the profit in GDP will be 0.2% lower. Fortunately, other car manufacturers who are active in Slovakia do not actually export their products there. This is especially noticeable in Germany, because BMW and Mercedes export about 15% of their production to the US, Audi about 10%.
However, a mutual process by the EU can be considered. For the consumer this can mean that the car manufacturers lower the prices and sell the shares for the American market. For Europe this can mean that it will focus more on the Asian markets. It was certainly not the fault that Slovakia was specialized in the car industry because there were a large number of engineers.
Volkswagen: We are a fair trade
Start of production: 1991
Number of employees: 13 700
Number of cars produced per year: 362000 (20% went to the US)
revenue: $ 7.55 billion
Volkswagen Slovakia is a free and fair trade and partnership as a basis for well-being, employment and sustainable growth of all stakeholders. Experience has shown that unilateral protectionism has not benefited anyone for long. Only free and fair trade can ensure the development of well-being
Kia: We will not touch it
Start of production: 2006
Number of employees: 3 600
Number of cars produced per year: 339000
revenue: 5.56 billion €
Due to the fact that Kia Motors Slovakia does not sell cars to the US, we should not consider the possible introduction of American import duties on cars.
Jaguar, Land Rover: the US is an important market
Start of production: 2018
Number of employees: 3000
Number of cars produced per year: 300 000
revenue: ? billion. € (production starts a few months)
The US is an important market for Jaguar Land Rover. It is necessary for us to have a global trade fair and for free. The car industry depends on open and fair trade, so we would worry about new taxes on imported goods. Such a measure would affect both our activities and the economy as a whole.
Start of production: 2006
Number of employees: 4 500
Number of cars produced per year: 335000
revenue: 2.5 billion €
The company did not comment on the problems.