Prague - The introduction of US tariffs on the import of car parts will affect domestic manufacturers rather indirectly, because only less than one percent of their production goes directly to the USA. The 25 per cent tariff will make these directly imported parts more expensive by about CZK 2 billion a year. This is based on data from the Association of Automotive Industries and Companies. The 25 per cent tariff on auto parts applies from today, while the US has been applying it to imports of complete cars since the beginning of April. "The United States of America is not a key export market for the Czech automotive industry. In 2023, only 0.8 per cent of Czech automotive exports worth CZK 9.3 billion went to the USA, and the Czech Republic does not export finished vehicles," said Zdeněk Petzl, the association's executive director. According to EY automotive market expert Petr Knap, the tariffs will have an indirect impact on Czech suppliers due to the problems of primarily German carmakers. "Preliminary estimates spoke of a billion USD annual loss for BMW and Mercedes. The decline in exports is said to be in the range of six to eight per cent for both Germany and Italy, where the largest exposure from an EU country is estimated. However, for the Czech Republic, the negative impact was also estimated to be between 0.3 and 0.5 percent of GDP, due to a drop in demand for parts and components that go into final vehicles or functional units," Knap noted. The long-term impact is quite serious, according to Knap, with manufacturers and suppliers considering new investments in product development and production for the US directly in North America rather than in Europe. “And of course, we are only in the initial stages of a potentially protracted trade conflict where everyone involved will lose, especially companies involved in a very complex and global automotive supply chain,” he added. "The automotive parts we manufacture are only supplied to European automotive manufacturers' plants, not directly to the US market. Therefore, the planned introduction of 25 percent tariffs on car parts will affect us rather indirectly," Miroslav Dvořák, CEO of Motor Jikov, told ČTK this week. Suppliers have not yet received any direct requests from European automotive partners for price adjustments or other concessions in connection with the current US measure. “However, we are ready to negotiate if there are price pressures throughout the supply chain in the future,” Dvořák said. U.S. President Donald Trump this week signed an executive order that will give automakers manufacturing in the United States relief from part of the 25 percent tariffs on cars to give manufacturers time to bring their supply chains back to the U.S. Automakers will receive credits of up to 15 percent of the value of vehicles assembled in the U.S., which they will be able to apply against the value of imported parts. Written by: ČTK