The risk of rising protectionism is once again looming over the global economy. Already in 2018, the US imposed tariffs on aluminium and steel imports. The steel and aluminium tariffs received widespread media attention. Tariffs on imports of washing machines and solar panels have remained in the background. The announcement of tariffs on steel and aluminium triggered a wave of negative reactions in a number of countries. Probably the most reluctant voice has been that of the European Commission, which has drawn up a list of retaliatory measures. And the issue has escalated with more threatening statements from the US side. Fortunately, the broader trade war has not flared up.

Even then, one of the cards the US was playing was tariffs on car imports from the EU. Now it is back on the table. At the time, there was talk of a possible 25% tariff. Perhaps unsurprisingly, such a move would hit Germany hardest, where a fall in car exports to the US would reduce GDP by more than 0.8%. A closer look reveals that many other sectors of the German economy would be affected, in addition to car production itself.

The direct impact of a possible tariff on EU car imports to the US would be minimal in the case of the Czech Republic. The number of cars supplied to the US market from the Czech Republic is minimal. The US is only in the top ten of the countries exporting cars from the Czech Republic. However, we have to take into account the indirect impact through the supply of parts to German and other European car manufacturers.