Starting Thursday, the US imposed a baseline 15% tariff on EU exports to the US, raising questions about the economic prospects of the bloc. Not just in a direct way, like exporting cars directly to the US, because the Czech Republic has not been exporting many cars there.  

However, there will also be an indirect negative influence. For example, Germans would face decreased demand from the United States for their products. Because of this lower demand, the overall aggregate demand for German products will be lower, and therefore, the demand of Germans for Czech subcontracting companies will also be lower. So there will be a negative impact on Czech foreign trade.

Czechia is highly dependent on the automotive sector, and here we see a positive development compared to the spring of this year because the tariff rate has been lowered for cars from 27.5% to 15%. So that is quite good news. But overall, the development is not good for the Czech economy, and it may hinder growth. We expect that GDP may be lower by 0.3% to 0.4% because of the tariffs

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