The new trade agreement between the European Union and the United States, which implements a 15% flat tariff on most goods, is projected to slow Czech economic growth by approximately 0.3 to 0.4 percentage points, analysts estimate. While the economic impact is not insignificant, experts agree that this outcome is preferable to the threat of even higher sector-specific tariffs, which had been creating uncertainty and dampening investment.

Key sectors anticipated to be most affected include engineering, electronics, and chemicals. Economists generally welcomed the agreement as a stabilizing factor in global trade, with the lower-than-expected tariff on automobiles providing relief for major exporters such as Germany and Slovakia.

Otto Daněk, vice-chair of the Czech Exporters’ Association, described the 15% tariff as “the maximum possible under current conditions.” While acknowledging that the deal is not ideal, Daněk viewed it as a positive development that brings predictability to transatlantic trade and helps calm market volatility.

However, Daněk cautioned that the full impact of the tariffs remains to be assessed. Some Czech companies have already begun relocating production to the United States, aligning with U.S. policy goals to encourage manufacturing within American borders. He further noted that the previously proposed 30% tariff would have effectively acted as an embargo.

The EU–US deal, struck just days before a threatened escalation, is expected to affect Czech exporters indirectly, primarily through Germany, the Czech Republic’s largest trade partner, which has significant exposure to the U.S. market.

Source: Czech Radio
Prepared by the team of foreign office CzechTrade South Korea (Seoul)