By JUSTIN SPIKE
BUDAPEST, Hungary (AP) — Hungary’s populist prime minister has spent years constructing a detailed political relationship with U.S. President Donald Trump and aligning himself with the MAGA motion.
However regardless of Viktor Orbán’s success in gaining favor with the culturally conservative and nationalist wing of Trump’s administration, his nation is poised to be amongst these laborious hit by Trump’s tariffs towards the European Union.
Trump earlier this month introduced he would levy tariffs of 30% towards Mexico and the EU starting Aug. 1 — a transfer that would trigger large upheaval between the USA and the 27-member EU, of which Hungary is a member.
As a small, export-oriented economic system with main car, pharmaceutical and wine industries — a number of the fundamental classes of merchandise Europe exports to the U.S. — Hungary might be notably weak to Trump’s tariffs.
The duties “would put the Hungarian economy in a very, very difficult situation, because then the entire possibility for Hungary to export to America would be essentially eliminated,” Péter Virovácz, chief analyst at ING Hungary, advised The Related Press.
‘Not the best way to make money’
Hungary’s largest buying and selling companions are different EU nations like Germany, Italy and Romania, in addition to China, however many Hungarian firms export their items throughout the Atlantic. Outgoing commerce to the USA represents round 15% of all Hungarian exports to nations outdoors the EU.
One such enterprise, a Budapest-based firm specializing in Hungarian wine, mentioned it should doubtless stop doing enterprise within the U.S. altogether if the 30% responsibility is levied on its merchandise.
“If it’s really going to be 30%, then there is no more shipment … We might just call it a day at the end of the year,” mentioned Gábor Bánfalvi, co-owner of Style Hungary.
Bánfalvi’s firm has been transport round 10,000 bottles of premium Hungarian wine per yr to the U.S. for about half a decade. With a base in Washington D.C., it exports a variety of purple and white wines to purchasers in quite a few U.S. states together with specialty wine outlets and bars.
Till now, “it’s been a thin profit margin, but it’s been fine because we want Hungarian wine to be available” to U.S. shoppers, Bánfalvi mentioned.
“Then came 2025,” he mentioned.
When Trump started imposing tariffs on EU exports earlier this yr, the price of Style Hungary’s shipments tripled, Bánfalvi mentioned — worth hikes he needed to construct into the sticker worth of the wine. The imposition of 30% tariffs would make exporting “unsustainable.”
“You just start to think, why are we doing this? Is it really worth it? It’s just not the best way to make money,” he mentioned.
In complete, the worth of EU-U.S. commerce in items and companies in 2024 amounted to 1.7 trillion euros ($2 trillion.)
Doubts that political ties may soften the blow
Hungary’s authorities, a vocal proponent of Trump’s “patriotic” overseas coverage prioritizing nationwide pursuits, has acknowledged that the tariffs would current a problem. However, cautious to not criticize the Trump administration, it has as an alternative blamed the EU, a frequent goal of Orbán’s scorn, for failing to achieve a complete commerce settlement with Washington.
Assured that his right-wing populist insurance policies would assist win him favor with Trump’s administration, Orbán mentioned in an interview in April that whereas tariffs “will be a disadvantage,” his authorities was negotiating “other economic agreements and issues that will offset them.”
However Péter Krekó, director of the Budapest-based Political Capital suppose tank, expressed doubt that political affinities may play a significant function in mitigating injury to Hungary’s economic system attributable to Trump’s commerce coverage.
“The unquestionably good bilateral relations simply cannot compensate for the trade conflicts between the EU and the U.S., and as a consequence, Hungary will suffer the tariffs the same way that the EU will,” Krekó mentioned. “Mutual nationalisms cannot be coordinated in a way that it is going to be a win-win situation.”
Automobile manufacturing and prescribed drugs
Virovácz, the economist, identified that Hungary is dwelling to quite a few car factories for main automakers like Audi and Mercedes. The manufacturing of automobiles and motorcar components represents an “overwhelming majority” of the nation’s complete exports, he mentioned.
FILE – Robotic arms function in a welding corridor of the Suzuki manufacturing plant in Esztergom, northern Hungary, Oct. 19, 2022. (Zsolt Szigetvary/MTI by way of AP, File)
Prescription drugs make up a good bigger share of Hungarian exports to the USA — an business on which Trump this month threatened to impose 200% tariffs. That “will essentially kill European and thus Hungarian exports to America,” Virovácz mentioned.
“It’s impossible for tariffs to be levied on EU products but not on Hungarian ones,” he mentioned. “A theoretical option is that Trump could somehow compensate Hungary because he’s on good terms with the Hungarian political leadership, but if that only starts happening now, it’s way too late.”
Krekó, the political analyst, mentioned Trump’s administration “gives practically nothing for free. If Hungary … cannot fulfill the interests of the U.S., then I think Hungary is not going to receive gifts.”
“Hungary just doesn’t have the cards, to use Trump’s terminology,” he added.
Initially Revealed: July 24, 2025 at 2:03 PM EDT
