January the 25th, 2025 – US President Donald Trump has been been talking the talk, but will he even be permitted to walk his desired walk? Whether or not Croatian companies need to be concerned with his discussions surrounding tariffs is the topic of the hour.
As Sinisa Malus/Poslovni Dnevnik writes, geopolitical rivalries, alliances and aspirations are changing the global economy and will continue to do so in the years ahead. That alone will accelerate the US introduction of import tariffs on foreign products and services, which was announced by Donald Trump on the very first day after his inauguration. This is among the key findings of the Centre for Geopolitics of the Boston Consulting Group.
eu alignment
Where are Croatian companies in all this and do they have reason to be afraid when it comes to Trump and the tariffs issue?
“Croatian companies that have regional and global reach face the challenge of building organisational capacities that will enable them to think about different business scenarios that are affected by geopolitical relations. That’s because things are becoming more and more complex and will have an increasing influence.
Judging by the latest announcements from the USA, it’s likely that we’re going to witness an increasing rise in trade protectionism over the next few years, as other countries and trading blocs are likely to react to the US introduction of tariffs,” said Melanie Seier Larsen, Croatian Partner and Director at Boston Consulting Group.
She added that in such a scenario, given that Croatian companies export primarily to other EU countries, the most important thing is to listen to how the EU itself will prepare for the new international trade regime. That’s because many Croatian companies produce goods which are inputs in high value-added production processes in EU Member States.
“A good example of this is the automotive industry and machinery manufacturing. It’s likely that the EU itself will look for ways to increase its own competitiveness, from a possible simplification of the support system to a faster flow of money for the development of new products. In that, Croatian companies will also have the opportunity to improve their technological and production processes.
Furthermore, during the COVID-19 crisis, we’ve already become familiar with an approach in which it’s important to ensure the shortest possible supply chains, which should protect Croatian manufacturers from the uncertainty of deliveries of production inputs. Croatian companies that have already started these processes should intensify them, and those that are lagging behind should start now,” stated Selar Larsen. The EU is in a particularly vulnerable position, and its focus should be on increasing competitiveness levels.
Geopolitical tensions, concerns about energy security, and changes in the regulatory framework have forced the EU to reevaluate its traditional trade relations. It’s now expected that bilateral trade with China could stagnate over the next decade, as will trade with Russia, which could fall by close to 106 billion US dollars by 2033.
BCG expects that the EU’s trade with its partners could grow at a rate of two percent per year before 2033. Annual trade with the US could reach 303 billion dollars by 2033, primarily due to European imports of US LNG gas, as well as due to increased exchanges with India and Africa. Croatian companies should continuously monitor EU initiatives to increase their own competitiveness in key sectors.
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