Serbia threatened by two major problems due to announced US tariffs on EU

The world is afraid of a trade war, as shown by the stock markets since this morning, which are all down. Great uncertainty is present after US President Donald Trump introduced tariffs to Canada and Mexico and announced that it would also happen to the EU. How devastating can this be in the coming period and what can Serbia do?

It is clear that Donald Trump’s next target is the European Union, and Serbia is highly dependent on that market, Mihailo Vesovic, the director of the Sector for Strategic Analyses, Services and Internationalization at the Chamber of Commerce of Serbia, told Blic Biznis.

Serbia is facing two big problems – a potential increase in prices, but also a barrier to Stellantis vehicles, the production of which is yet to start here.

Why is Donald Trump introducing tariffs now?

– Although there has only been an announcement, it is obvious that the Trump administration is taking quick steps in order to primarily protect the American market from excessive imports, that is, to increase the level of production in the United States itself. The move with Canada and with Mexico and China is a clear signal that the next topic now is the European Union – said Vesovic and pointed out that it was primarily food products, pharmaceutical products and the automotive industry.

At the same time, he clarifies that it is primarily about large car manufacturers, but also a certain part of component manufacturers.

What consequences can Serbia expect from Trump’s tariffs?

– As far as Serbia is concerned, we belong to the sphere of the economic interest of the EU as a major supplier. Not to mention the start of production in Stellantis of a new model which, probably, was partly of interest to the EU above all. The production is primarily intended for the EU, but certainly partly also for America. This may further reduce the competitiveness of Stellantis vehicles and likely limit the number of vehicles potentially sold in the US.

According to him, Serbia must closely monitor what the EU will do and what steps it will take, especially since it will not have a better status than EU products have on the American territory.

Is the concept of “free trade” dying?

When asked if this somehow means that there is no more free trade in the world, Vesovic responds:

– The free market and free trade, as we have known them for the last 20 years and which we have witnessed as a global trend, have been lost, but in the short term we will have a significant disruption and, probably, a major restructuring of the way global trade functions and clear lines within it, which countries are friendly, which are not, and trade policy will be formed accordingly, and the United States of America is now obviously at a turning point and has its own internal problems that they expect to be able to solve this way.

Vesovic warns that there is a threat of recession and potentially major disruption for global trade in conditions where the European Union is completely energy dependent, still dependent on imports.

– The effect on the overall competitiveness of the European economy will certainly be felt, and this will very quickly be reflected in our economy. Serbia is at least 60% dependent on what happens on the European market – he says.

As a potential solution, he sees turning our market towards what is currently stable:

– Serbia should now turn its attention to strengthening and, above all, orientation to regional cooperation, monitoring the policies of the European Union, in the hope that we will not face any additional pressures that we already see through the possible threat of sanctions against NIS, which could further complicate this situation – Vesovic said for Blic Biznis.

Privredna komora Srbije

Chamber of Commerce of Serbia

Mihailo Vesović

Donald Trump

tariffs

US tariffs on EU