Sakova: Carmakers Already Feeling US Tariffs, Reporting Drop in Orders

Bratislava, 4 July (TASR) - Automakers operating in Slovakia are already feeling the negative impact of the new US import tariffs on cars, with a decline in orders for the third quarter of the year, Economy Minister Denisa Sakova (Voice-SD) said on Friday following a special session of the government. According to her, specific figures are not yet available and may be considered to be trade secrets. The export shortfall to the USA is affecting two major car manufacturers in Slovakia in particular – Volkswagen and Jaguar Land Rover. "Our latest information indicates that there is already a decline in orders for these two companies in the third production quarter, and the effects are starting to show,” said Sakova. She added that the government is working to open up new markets where these companies could redirect their products. Talks between the European Union and the United States are ongoing, led by European Commissioner for Trade and Economic Security Maros Sefcovic. However, Sakova noted that no progress has been made so far. Current tariffs on car imports to the US stand at 27.5 percent, consisting of a long-standing 2.5 percent base rate and an additional 25 percent imposed by the new US administration under Donald Trump. If no agreement is reached, the EU has prepared retaliatory measures targeting US exports, said the minister. Addressing concerns over a possible relocation of car production to the USA, Sakova stressed that such a move is neither simple nor rapidly carried out. "Relocating these investments is a medium- to long-term process. It's unrealistic to think that car production could shift in just one or two years,” she said, adding that based on experience in Slovakia, such a process could take four to six years. Sakova also cited data from the Slovak central bank (NBS), which estimates that the new US tariff policy could impact Slovakia’s economy by approximately 2.9 percent of its GDP, with two-thirds of that directly affecting the automotive sector. The United States is the second-most important market for Slovak carmakers, accounting for over 10 percent of their exports. When it comes to the two most affected companies, exports to the US represent 20 to 25 percent of their total production. mf/df