Head of the Zagreb-based Institute of Economics, Maruska Vizek, appeared on N1 television's morning programme Novi Dan on Thursday, to comment on current economy affairs and whether Croatia might feel the impact of EU-US trade war.
In one of your comments, you wrote that a trade war between the US and the EU could result damaging consequences?
Trump promised in his campaign that he would improve the US’ position in global economy. The US has been posting a tarde deficit for years. It is my impression that Trump is approaching the problem in a wise and intelligfent manner, and wants to fulfill his campaign promise, using any means at his disposal. It seems that the trade war will end up with a little bit of tariffs introduced and a lot of threats, and that he will succeed in negotiating a better treatment of the US in global trade.
Trump started introducing tariffs on steel and aluminium from the EU, and the measure is aimed at countries that bother him the most, Germany and France – and especially Germany. He also threatened with raising tariffs on imported cars, which would mainly hit Germany. Only large countries – when imposing tariffs – can hope that their economy would benefit and that their prosperity would grow. But only if their large trading partners do not respond in kind. However, we see now that large countries are striking back at the US. This will eventually damage the global trade, because it will result in the shrinking of the global economy.
Can this affect Croatian companies?
For the time being, Trump made good on only a small portion of his threats directed at the EU. Tariffs to aluminium and steel have been introduced, but these are not really produced in Croatia so the economy wasn’t affected by them. However, if the US decides to expand the list of products that tariffs are applied to, and especially to cars, then Croatian businesses who make car parts for export will be hit. If the trade war increases in scope, and if global trade and GDP shrink, this will also affect Croatia’s economy.
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