Economists predict that the U.S. tariffs could lead to a potential decline in Serbia’s GDP by up to 1% annually. While Serbia is among the top 10 countries globally affected by the new tariffs, this development is not being celebrated.
U.S. President Donald Trump introduced new tariffs on goods from over 180 countries and territories. The 37% tariff imposed on Serbian products is higher than the rates applied to other Balkan nations.
According to economist Gordana Bulatović, Serbia’s tariffs are “among the highest in Europe,” reflecting Washington’s assessment that Serbia imposes significant trade barriers on American goods. This could have “multiple negative consequences,” Bulatović warns.
The Serbian economy could lose between €135 million and €175 million annually, representing 0.3 to 0.4% of the country’s GDP. It could also jeopardize 5,000 to 7,000 jobs in affected sectors. Bulatović emphasizes that these effects represent only the initial round; the long-term impact could be much larger.
In 2024, trade between Serbia and the U.S. totaled over $1.4 billion, with Serbia importing more than it exported, resulting in a $70 million trade deficit. In contrast, neighboring countries such as Bosnia and Herzegovina, North Macedonia, and Montenegro face lower tariffs.
Bulatović believes that the 37% tariff could reduce demand for Serbian products in the U.S. by about a third. “When an American consumer must pay 37 euros more on a product worth 100 euros, naturally, demand will drop, and many will turn to competitors from countries with lower tariffs,” she explains. Moreover, identical products from Montenegro, for instance, would be 27% cheaper in the U.S.
In addition to direct export challenges, Serbia’s economy may also suffer indirectly. About 60% of Serbia’s exports go to EU countries, which will face U.S. tariffs of 20%. Serbian semi-finished products that are incorporated into EU final products destined for the U.S. will lose competitiveness.
Several sectors, including metals, automotive, agriculture, electrical equipment, and rubber and plastics, could face significant losses. The automotive industry, in particular, is at risk, potentially losing around €45 million annually. Overall, economists project a potential GDP drop of 0.5 to 1%.
The IT sector, which exports services to the U.S., is likely to be unaffected by the tariffs. In 2024, Serbia’s service exports to the U.S. totaled €1.8 billion, primarily in IT services.
The tariffs could also weaken the Serbian dinar, which economists believe is overvalued against the euro, and this imbalance could become more pronounced due to the economic slowdown.
The differences in tariff rates between Serbia and other Balkan nations could shift trade patterns, creating new economic relationships with countries that have lower tariffs. Serbia will need to find ways to counterbalance this competitive disadvantage, possibly through diplomatic negotiations, exploring new markets, or investing in sectors with favorable tariff regimes.
Overall, Serbia’s exports to the U.S. amounted to just over $670 million in 2024, while imports were worth over $739 million. Serbian exports to the U.S. primarily included car tires, weapons, and machinery, while imports from the U.S. included non-electric machinery, aircraft, and chemicals.
The U.S. has set tariffs based on its assessment of trade imbalances, applying higher tariffs where it perceives significant trade barriers. This move can also be seen through a political lens, with some analysts suggesting that the tariffs are politically motivated, urging Serbia to align more closely with U.S. foreign policy.
The Serbian Chamber of Commerce has expressed confusion over the high tariffs, calling for diplomatic negotiations to reduce them, as was done with previous sanctions on Serbia’s oil industry.
European and global officials have largely condemned Trump’s measures, and responses from Brussels and Beijing are expected soon.
