The recent agreement between the European Union (EU) and the United States (US) to reduce tariffs on EU exports from a planned 30% to 15% starting August 1 brings some relief to global markets, including Serbia’s. However, experts warn this deal includes political and economic pressures that may negatively impact Serbia.
The EU agreed to invest $600 billion in the US and purchase $750 billion worth of American energy products over the next three years. This arrangement is seen by many as humiliating for the EU and could result in a redirection of European investments away from the Western Balkans, including Serbia.
Professor Ljubodrag Savić from the University of Belgrade notes that while the reduced tariff rate is positive, it remains a setback since tariffs were previously minimal. He warns that the investment commitments to the US may decrease funds flowing into Serbia and the region. He also doubts Serbia can negotiate a lower US tariff rate, suggesting political concessions related to sanctions on Russia, aid to Ukraine, or the Oil Industry of Serbia (NIS) might be required.
Analyst Bogdan Petrović calls the deal deeply unfavorable to the EU, highlighting its one-sided nature. The EU removes tariffs on American goods while imposing a 15% tariff on European products, along with large purchase commitments. This creates risks for Serbia, given its heavy reliance on the EU market.
Petrović points out that the recent weakening of the US dollar against the euro somewhat offsets tariff impacts. However, if the dollar strengthens again, European exporters could face serious difficulties. Serbia’s exports to the US are limited, mostly ammunition and rubber products, and the country has little negotiating power.
He also notes discrepancies in trade data, as American exports to Serbia are often routed through third countries for tax reasons, complicating tariff application. Petrović criticizes the Serbian government for not engaging early with US officials to address the tariff threat, despite promises to secure an agreement.
In summary, while the EU-US deal avoids the harsher 30% tariffs, it carries significant economic and political consequences. Serbia faces risks from reduced European investment inflows and high US tariffs, with limited options for mitigation.
