Analysis:Trump's tariff crisis creates opportunities for Romania

The commercial war started by Donald Trump, ‘the special operation” through which the administration in Washington tries to reduced the dependence on imports and reset investment opportunities in America, may be exploited positively by Romania, especially as the exposure of our country is a reduced one, shows a recent analysis by the Frames, consulting agency, published on Monday.According to the analysts, the fact that we have economic relations which are rather symbolic with the US (2.2 billion euro exports/1.3 billion euro imports) may represent, paradoxically, an advantage for Romania, from the perspective of the impact of the tariffs war.In essence, the effects may be rather limited, 2-3 billion euro annually, taking into consideration of the reduced exposure both in the auto industry and in that of furniture, IT, chemical products, etc. As Romania cannot negotiate customs tariffs with Washington directly, as this is the exclusive attribute of the European Commission, what we have to do is to go hunting for investors, consider the analysts of the company. As the uncertainty feeling is dominating, the countries which come with concrete investment offers will have a significant advantage in a sea of problems, the quoted source says.'It is absolutely necessary for the Ministry of Economy, the National Commission for Strategy and Forecasting, the Government and the other institutions involved to build a package offer for investors - tax incentives for greenfield investors, concession offers with zero tariffs for publicly owned land, a one-stop office for the approval of authorisations and obtaining all the necessary documents for those who want to invest in Romania. Instead of the tax on the top and turnover tax for multinationals, we should come up with incentives for those who reinvest capital in fixed assets, for those who want to create jobs in Romania. From this perspective, I hope that the tax reform prepared by the Minister of Finance will announce lower taxes, especially on labour, the elimination of taxes on the tax base and turnover, together, of course, with concrete measures to reduce tax evasion,'' says Adrian Negrescu, manager of Frames, quoted in the press release. Romania has the potential to attract investment worth more than €50bn over the next decade, especially in the context of Ukraine's reconstruction and the exploitation of Romania's natural resources, according to a Frames study on investment opportunities in Romania, launched at the end of last year.‘The development of legislation favourable for investments in industrial parks must be in the foreground, together with focus on energy area – electricity and gas having the chance to become our main export goods in the horizon of ten years’ shows the Frames analysis.Frames analysts pointed out that the Bucharest Stock Exchange has lost more than 5.6 billion euros (28 billion lei) in the last week and believe that it must become the main financial instrument of the economy in the coming years. According to them, it is absolutely necessary that the government come quickly with concrete strategy for the support of the sectors affected by the tariffs crisis.Practically, the state must alter the legislation in the stock exchange domain, in the sense of reducing taxes for those who support the development of an alternative to banking financing, very dear on a medium and long term.'By supporting investment funds that have the courage to invest in Romanian companies, by providing facilities for those who buy shares, who support Romanian companies, we can develop an alternative offer, cheaper than the banking offer, for companies in our country. At this time we need action, not uncertainty, and we can quickly build an investment offer that will attract the capital flows affected by this lack of economic predictability'', says the Frames analysis.