Hungarian prime minister Viktor Orban promised that the return of his ‘dear friend’ Donald Trump as US president would usher in a new ‘golden age’.
But trade unionist Zoltan Laszlo says Hungary’s auto industry has seen the opposite as the United States announced new tariffs, with order cancellations and workflow disruptions marking employees’ day-to-day experience.
With tariff rates rising from 2.5 per cent before Trump’s return to around 25 per cent and finally to 15 per cent, the ‘American tariff slalom’ has caused nothing but chaos in the car industry, said Laszlo, who represents workers at Mexican automotive parts manufacturer Nemak’s Hungarian plant.
In recent years, Hungary and neighbouring Slovakia have become European manufacturing hubs for global car brands seeking lower labour costs, including British Jaguar Land Rover, German Mercedes and Japanese Suzuki.
But due to the export-oriented nature of their automotive sectors, catering in part to the US market, they are among those EU nations hardest-hit by the latest tariffs slated to kick in on August 7.
Despite hailing Trump’s comeback and visiting him twice at his Mar-a-Lago luxury estate last year, Orban — his closest EU ally — was not spared the pain.
Neither were more favourable conditions extended to Slovakian Prime Minister Robert Fico, whose country is the world’s largest automobile manufacturer per capita.
According to analyst Matej Hornak, the incoming tariffs won’t bode well. He warns of a drop in exports amounting to ‘several hundred million euros’ and the loss of ‘10,000-12,000’ jobs in the sector.
After the announcement of the EU-US trade deal, Orban was quick to apportion blame to EU Commission president Ursula von der Leyen, saying Trump ‘ate’ her ‘for breakfast’.
But in April, the mayor of the Hungarian city of Gyor, whose strong economic growth is closely linked to its car manufacturing plants, had already warned of possible cutbacks and layoffs.
For the city, which is home to various global brands and more than a dozen different parts and component suppliers including Nemak, the fresh tariffs are a disaster.
As one of the biggest employers in Hungary, German carmaker Volkswagen alone provides jobs for more than 12,000 people. Its main engine factory in Gyor produces some Audi-branded vehicles directly for the US market.
The Hungarian government has said that it is still assessing the impact of the tariff rates, vowing that upcoming business deals with Washington could mitigate the negative effects of Trump’s ‘America first’ policy.
But more headwinds are ahead for Hungary and Slovakia, said Brussels-based geopolitical analyst Botond Feledy.
‘When it comes to European dealmaking, Trump now prioritises more geopolitically influential figures — the main option for smaller nations such as Slovakia and Hungary is to join forces with others,’ he told AFP.
But the ‘aggressive posturing’ in the same vein of Trump’s protectionist policies both countries adopted in recent months have isolated them among fellow EU countries, making compromises difficult, the expert added.
