Economic consultant: New US tariffs will hit Romania mainly through its trade relations with EU

Romania will feel the brunt of the 20% tariffs imposed by the US on the European Union via its trade relations with other European countries, particularly with Germany, France, Italy and Spain, which export heavily to the US, economic consultant Adrian Negrescu said on Thursday.In his opinion, Romania needs measures aimed at supporting domestic consumption, economic chains, and should reduce its exposure to the trade war triggered by Trump. The automotive industry is the most severely hit, followed by metallurgy and the chemical industry, sectors that will take the blow of the second-round effects of the trade war."Unless we take appropriate measures, we will be certain victims of the trade war triggered by Trump," Negrescu said, adding that even if at a first glance Romania won't be very affected, as its exports to the US do not exceed 4 billion dollars annually, it will feel the brunt through the trade relations it has with other European countries. "If these partner countries no longer produce that much for the US as a result of the additional taxation, orders for products, subassemblies and raw materials from Romania will dwindle too. From the automotive industry - the most seriously hurt, to the metallurgical industry (steel, aluminum, iron etc.) to the chemical industry, all these sectors will be hit by the second-round effects of the trade war," explained Adrian Negrescu.According to him, the trade war will raise a new wave of inflation worldwide that will be felt from the second half of the year. "There are already estimates that international transport companies will raise fees by 15-20% as a result of the trade war and this means that clothing, footwear, electronics, household appliances, food - everything we import will become more expensive," explained the economic consultant.He stressed that, regrettably, this trade war risks dragging the world economy into recession, because trade interdependence is extremely high."It appears that President Trump has not learned anything or perhaps does not know what happened in the 1930s when, after the stock market's 1929 crash, President Hoover enacted a tariff law which increased customs duties on imported goods. The effects were heavily felt in the American economy - bankruptcies, unemployment and the rippling of the stock market crisis to the economic market. The Great Depression then engulfed the entire world. The good news is that economies are no longer as vulnerable as they were back then, but that does not mean that this trade war won't produce multiple victims," Negrescu said.According to him, the authorities' promises about granting state aid for the areas affected by the trade war "seem ridiculous at this moment" because "first of all, the state does not have the money to grant financial aid - let's not forget that it has frozen even child allowances, a decision worthy of a banana country - and secondly, it has not met its other promises: the famous and ridiculous 1 billion euro project to reindustrialize Romania has not been included in the 2025 budget.""And what is Romania doing? It just walks into a pitfall. In the midst of a trade war, in a period where investors are completely disoriented by the measures announced by Trump, at the most unfortunate moment possible, the government approves today the pole tax, the tax on special constructions. There could not have been a worse moment to announce a one-of-a-kind tax worldwide, a tax that we have already applied before and which has proven harmful to the economy, driving investors away," Negrescu said.In his opinion, in order to help the Romanian economy, the government should scrap the pole tax, the turnover tax for large companies, reduce the multiple taxes implemented over the last two years, especially those for the SME sector, reduce labor taxes, which are among the highest in the EU, and fiscally stimulate reinvested capital. At the same time, he referred to the need to list state-owned companies on the Bucharest Stock Exchange, and essentially support domestic capital especially through fiscal predictability.The government approved on Thursday an emergency ordinance amending the regulations regarding the tax for special constructions, Finance Minister Tanczos Barna announced at the end of the Executive's meeting.US President Trump announced tariffs of 20% for products imported from the European Union, 34% for those from China, 31% for Switzerland, 26% for India, 10% for Great Britain, 10% for Brazil, and made it clear that any product entering the US will be taxed at least 10%.