Slovakia, a small landlocked country in the heart of Europe, is uniquely exposed to President-elect Donald Trump’s “America First” economic agenda. The country, nicknamed the “Detroit of Europe” due to its thriving automotive industry, produces more cars per capita than any other country in the world. Trump’s pledge to impose a blanket 10% or 20% tariff on all goods coming into the U.S. threatens to tarnish Slovakia’s reputation as a global leader in car production.
Slovakia relies heavily on U.S. trade, with autos accounting for a sizable chunk of its U.S. exports and the sector indirectly employing over 250,000 people. The country’s automakers, including Volkswagen, Peugeot, Hyundai Motor’s Kia, and Tata’s Jaguar Land Rover, have established manufacturing hubs in Slovakia.
The prospect of U.S. tariffs on European autos is likely to make a bad situation in Germany, Europe’s biggest economy, even worse. Germany is by far the region’s largest exporter of passenger cars to the U.S., accounting for 23 billion euros worth of exports last year. Slovakia, meanwhile, is Europe’s joint-third-largest exporter of passenger cars to the U.S., with 4 billion euros worth of exports in 2023.
Slovakia’s passenger car exports account for nearly three-quarters (74%) of its overall export package to the U.S., leaving the country acutely exposed to the looming threat of Trump tariffs. The country’s automakers have proven to be relatively good at dealing with challenges in the past, but the uncertainty surrounding Trump’s tariffs is a concern.
European lawmakers are trying to hold their ground by not allowing Chinese automakers to penetrate the regional market too much, both in terms of sales and investment. The European Commission, the EU’s executive arm, has referred to European Commission President Ursula von der Leyen’s statement congratulating Trump on his election victory when asked to comment about the prospect of U.S. tariffs.
