As of August 1, a new trade agreement between the European Union and the United States will impose a 15 percent import tariff on European goods entering the American market—prompting strong reactions from Croatian businesses and government officials alike.
To address the implications of the deal, Croatia’s Ministry of Economy will host a meeting tomorrow of the Government Commission for Monitoring Exports to the United States. The aim is to assess how best to support exporters affected by the agreement, which comes into force this week, reports HRT.
In Karlovac, leading manufacturer HS Produkt—whose exports to the US account for nearly 70 percent of its output—has been preparing for months. Earlier this year, as uncertainty loomed, the company even considered layoffs.
“Back when we feared tariffs of 30, 40, even 50 percent, things looked far worse. A 15 percent rate, while not ideal, is more manageable,” said Željko Pavlin, President of the HS Produkt Management Board. “For now, we’re not planning job cuts. We’re fortunate to have strong alternative markets beyond the US that we continue to develop.”
But the impact on competitiveness is compounded by a weakening US dollar. “The dollar has fallen around 10 percent since April, which is effectively another 10 percent tariff,” Pavlin added. “Together with the new duties, this will inevitably raise prices and reduce sales potential.”
Industry leaders and economic experts have voiced concern over the broader consequences. Irena Weber, Director General of the Croatian Employers’ Association, warned that the agreement could undermine the productivity and global standing of European and Croatian firms.
“Our key sectors—pharmaceuticals, defense and ammunition, and chemicals—will undoubtedly face challenges under this deal. We also need to consider the knock-on effects for exporters linked to the automotive industry,” Weber said.
Deputy Prime Minister and Minister of Maritime Affairs, Transport, and Infrastructure, Oleg Butković, took a more measured tone. “It’s hard to assess the full impact at this stage. What matters is that an agreement was reached. We’ll see the real consequences once implementation begins.”
Croatia’s pharmaceutical industry, previously exempt from tariffs, is watching developments closely. “The agreement envisions a zero-percent tariff on pharmaceutical and generic products while investigations in the US are ongoing. Even in the event of negative outcomes, tariffs on those goods should not exceed the agreed 15 percent,” said Zdenko Lucić, State Secretary at the Ministry of Foreign and European Affairs.
As Croatian exporters brace for a shifting transatlantic landscape, tomorrow’s government session aims to provide clarity and assistance in navigating what could become one of the most complex trade environments in recent years.