Trade War of Tariffs: What It Means for EU and Hungarian Businesses
The recent U.S. executive order introducing a wide range of import tariffs marks a new escalation in the ongoing global trade war. While the measures aim to reduce the U.S. trade deficit, they may significantly impact European exporters, including businesses based in Hungary.
Targeted Tariffs and Exemptions
Effective 5 April 2025, a general 10% import tariff was introduced on all goods entering the United States. Certain sectors face higher rates: iron, steel, aluminium, and automobiles are now subject to a 25% tariff. A second phase introduced differentiated tariffs of 11% to 50% on goods from 57 jurisdictions.
From 2 May 2025, the U.S. also withdrew preferential treatments, including the USD 800 exemption for goods from China and Hong Kong.
As Hungary is part of the EU Customs Union, its exports fall under these measures. In practice, EU goods face:
A general 10% or 25% tariff, depending on product type;
An additional 20% differentiated tariff on top, although implementation of this last layer was suspended for 90 days.
Meanwhile, China is already subject to a combined 145% tariff.
Some relief has come through temporary exemptions for certain electronics — including smartphones, semiconductors, solar panels and memory cards — introduced on 11 April 2025.
Administrative Uncertainty for EU Exporters
Companies exporting to the U.S. must navigate complex rules of origin, which differ from EU standards. Certificates of origin issued in Europe may not be accepted as-is by U.S. customs authorities. For products with multi-country supply chains, it's advisable to consult a U.S.-based trade advisor to avoid costly misclassification.
EU Response and Countermeasures
The European Union’s earlier retaliatory tariffs were suspended following de-escalation during the Biden administration. Most recently, the EU extended this suspension until 14 July 2025 in hopes of reaching a negotiated solution.
Nonetheless, a new counter-package worth €18 billion is on standby, targeting a wide range of industrial and agricultural imports from the U.S. It is planned for two phases (May and December 2025), but implementation has been postponed to align with ongoing diplomatic efforts.
What Should Businesses Do?
Both importers and exporters are advised to prepare for volatility. This includes:
Monitoring regulatory updates from U.S. and EU authorities;
Reviewing customs classifications and country of origin assessments;
Reassessing long-term contracts that may not account for tariff volatility.
While Hungarian businesses are directly affected, the broader implications stretch across Europe, making this an issue of cross-border concern for companies navigating international supply chains.
