TRUMP’S CUSTOMS WILL BE FELT BY EVERYONE: An indirect attack on Serbia’s economy as well, two very important sectors will be under attack!

At the time of writing, U.S. President Donald Trump has nonetheless delayed the application of 25 percent tariffs on about half of Mexican goods and about 38 percent of Canadian goods entering the U.S. market until April 2.

That is the date when the new tariffs could come into force – and “could” is the most accurate that can be claimed today, because the decisions change from day to day, so Canada, as reported by the AP, still plans counter tariffs, which were also announced by China.

European companies are preparing for the “April strike” by trying to organize the supply of the Canadian market or their factories in Mexico via alternative routes, while Serbia, according to Bojan Stanić from the Center for Threat Analysis of the Serbian Chamber of Commerce, for now does not have to fear direct consequences for the export of goods to the USA.

“About 40 percent of our exports to the U.S. are automotive tires and specialty industry products. In this sense, we do not see direct consequences for Serbia, considering that it is about the tariffs that the USA is introducing for the steel, metal and food industries. “The key problem is protectionism, which limits trade and its potential for growth on a global level, which consequently affects developing economies that rely on exports and imports,” Stanić told Nedeljnik.rs.

POSSIBLE DECREASE IN DEMAND FOR SERBIAN GOODS ON THE EUROPEAN MARKET

How important exports are for Serbia is also shown by the statement of MK Group CEO Mihajlo Janković at the Kopaonik Business Forum, when he said that according to some research, one percent of export growth brings 0.47% of GDP growth.

“We are entering a period when the ‘export or die’ rule will once again apply to developing countries,” Janković said vividly.

Export growth, however, will be a difficult undertaking in times of “economic schizophrenia”, as Ivan Nikolić, editor of Macroeconomic Analysis and Trends, calls current global events.

An additional challenge for Serbia is that its key export market is the European Union.

As our interlocutor Bojan Stanić warns, Europe is “under attack” as a result of US tariffs and countermeasures of the affected countries, especially bearing in mind that it has given up Russian energy sources and is trying to reduce, but will, its dependence on Chinese products. As some US tariffs go into effect in early April, the question is where will they market their goods.

“It is assumed that European countries will turn to the internal market, trying to strengthen their own position, and there is a possibility that they will introduce countermeasures.” “Serbia could be ‘hooked’ by those countermeasures, as it already happened in 2015 with steel quotas,” warned Stanić.

The consequence of such developments is a potential decrease in demand for products from Serbia on the European market.

“I’m specifically referring to our chemical and automotive or metal industry, and later agriculture. All in all, we will feel the indirect consequences of American tariffs, but they are also very worrying considering that those two sectors are the backbone of our exports,” concluded Stanić.

GLOBAL RISKS TO GDP GROWTH OF SERBIA

One of the scenarios for the growth of Serbian GDP in 2025, developed by the National Bank of Serbia (NBS), also points to the consequences of the growth of protectionism.

In that “pessimistic” scenario, NBS analysts warn that after the increase in US tariffs on goods from China, Mexico and Canada, as well as countermeasures by the affected countries, there is a risk of further escalation of trade tensions, including the introduction of additional trade barriers between the US and the EU.

“In the event that global economic growth is lower than expected and if global tensions are further aggravated and additional customs duties are introduced by some 10 percentage points, this would mean lower economic growth in Serbia by around 0.3 to 0.4 percentage points,” it was said at the presentation of the February NBS Inflation Report.

“The strengthening of protectionism currently represents a significant risk to the realization of economic projections, which is why caution is needed.”
in conducting the monetary policies of central banks, including the NBS,” is the conclusion of our central bank’s analysis. The National Bank, by the way, expects Serbia to achieve GDP growth of 4.5 percent in 2025.