Hungary government to draw up plans to protect jobs after US-EU trade deal

BUDAPEST: Hungary’s government will draw up plans to protect the country’s jobs and manufacturing after the trade deal between the United States and the European Union, Prime Minister Viktor Orban told public radio on Friday.

The US and the EU announced a trade agreement on Sunday setting a 15 per cent tariff on the bloc’s exports to the United States. The levy includes cars, a mainstay of central European exports, which previously incurred a tariff of 2.5 per cent.

Orban said Hungary’s total exports to the United States were worth some US$11 billion a year.

“We have to draw up two action plans, one is an action plan to protect jobs, to make sure that foreign companies working in Hungary do not react by laying off people. Or, if they do, we need to offer those people jobs immediately,” Orban said.

The second plan was needed to make sure no manufacturing plants were shut down as a result of the tariffs, said Orban, who has struggled to revive Hungary’s economy from the EU’s worst inflationary surge following Russia’s 2022 invasion of Ukraine.

Orban, who faces what political analysts say will be a closely fought election next year, sharply criticised European Commission President Ursula von der Leyen on Monday for what he said was a poorly negotiated deal.

Hungary’s government has not published an estimate about the tariffs’ impact on growth, although the economy ministry slashed its 2025 economic growth forecast to one per cent on Tuesday from the 2.5 per cent it expected at the start of the year.

Concordia, Romania’s largest employers’ association, has estimated the tariffs could shave up to 0.20 per cent off the country’s growth, while the Czech finance ministry said tariffs would slow expansion there by 0.20 percentage points for the remainder of the year.

For neighbouring Slovakia, whose share of goods’ exports as a percentage of national output is the highest in the EU, Societe Generale economists have estimated the tariff impact at 0.87 per cent of gross domestic product.

Polish Prime Minister Donald Tusk said Poland, the EU’s largest economy outside the euro zone, could lose around 8 billion zlotys.

© New Straits Times Press (M) Bhd

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