Trump and customs duties: Impact on Romania’s exports

The total value of Romania’s exports to the United States is estimated at about $ 4 billion, but most of these exports are low value -added products, for which alternatives can be found in the European Union.

According to the university professor of Economics, Cristian Păun, between 50-60% of these exports include electrical equipment, steel and steel processed products, vehicles, subansambles and parts.

« This is about $ 4 billion, the total value of exports to the United States. Applying these customs duties does not mean that exports will be canceled. A good part of them will be done with these customs.

Cristian Păun emphasizes that most of the products exported by Romania in the United States are not very processed and do not have a significant added value, which makes the alternatives easy to find on the European Union market. « They are not very processed, they are not very sophisticated, they do not have a very high added value, which means we will easily find alternatives for these products within the European Union or we will be able to look for new customers for some of them, other than those in the United States, » Păun explained.

However, he warns that, although the direct impact could be limited, the indirect effects of these customs duties will be able to occur in commercial relations with other Member States of the European Union. « It is not a high value and are not very high complexity. This means that, directly, we will not be very affected, but indirectly, some problems can occur, in the sense that there are other commercial partners in the European Union, such as, for example, Germany, the Netherlands, France, Italy, who have significant exports in the United States and who will see for these products.

In the context of commercial tensions between the United States and the European Union, Păun warns that the customs duties imposed by the Trump administration could lead to a significant decrease of the orders for American products. It argues that a relevant example would be Ford, which produces cars in both Romania and the United States. Due to customs duties, the costs of production in the US will increase, and exports of American cars will become more expensive on foreign markets, including in the European Union.

« The US company Ford produces cars in Romania and the US. Due to customs duties, Ford car production will become more expensive on the raw materials, components and subassemblies. With about 10%… When the US Ford will want to sell cars in the global business, they will have higher customs taxes that will surely increase. »

Moreover, the teacher warns that this commercial war could lead to the relocation of production from the United States to other regions of the world, including Europe. « The American companies that produce for global markets will come out of the camp built by customs.

In the long term, Păun is of the opinion that the protectionist policy of the Trump administration could have negative effects on the American economy, and the European Union states should take advantage of these opportunities to strengthen trade between them and other global markets.

« If the EU will quickly sign freely treating with UK, Canada, India, Latin America, Australia, Japan and Asia, the US blow will be devastating. Trump will remain with the production of dollars, taxes and Crypto, with a commercial deficit, with a higher inflation and with higher unemployment, » Păun concluded.

In conclusion, while Romania will not be directly affected by the customs duties imposed by the US, their indirect impact could influence the commercial relations of the European Union and could cause a significant change in the distribution of production on the global markets.