Slovakia's car industry at risk as Trump eyes new tariffs
Slovakia produces more cars per capita than any other country in the world. However, its automotive sector is heavily dependent on trade with the United States. Tariffs announced by Donald Trump could threaten the "Detroit of Europe."
6:42 AM EST, November 27, 2024
Slovakia has worked for years to earn the title of the "Detroit of Europe." Today, the automotive industry employs about 250,000 people in a country of 5.5 million, as CNBC reports.
"In 1990, after the fall of the Iron Curtain, Slovakia produced exactly zero cars. But it was very strong in what we in our local language like to call special manufacturing, which is just a nice way to say arms production, armored vehicles, tanks and what have you," said Vladimir Vaňo, chief economist at Globsec, a think tank based in Slovakia's capital, Bratislava, to CNBC.
Over the years, however, the country has developed in car production, relying heavily on trade with the United States. "Slovakia has turned into the Detroit of Europe," Vaňo emphasized. Today, it produces more cars per capita than any other country in the world.
Nevertheless, Slovakia has cause for concern. The issue is the tariffs announced by President-elect Donald Trump, set at 10% or 20% on all goods imported to the USA.
On Monday, Trump announced that one of the first acts he will undertake after taking office is imposing new tariffs on China (10%) and Canada and Mexico (25%).
Although the fact that Europe was not mentioned is considered good news for European Union decision-makers, "the 27-nation bloc is likely worried that it’s just a matter of time before Trump turns his attention to the region’s auto sector," CNBC assesses.
