Trump’s Tariffs Challenge Slovakia’s Auto Industry, But Change Was Overdue

The implementation of US auto tariffs under President Donald Trump has sparked concerns across Europe, particularly in Slovakia, where the car industry plays a significant role in the national economy, Deutsche Welle reports.

With around one million cars produced annually, Slovakia is the world’s largest carmaker per capita. This heavy reliance on auto exports, particularly to the US, has left the country vulnerable to Trump’s trade policies.

The auto sector makes up 11% of Slovakia’s economy and accounts for 30% of its exports. Companies like Volkswagen, Jaguar Land Rover, Stellantis, and Kia employ roughly 225,000 people—nearly 10% of the country’s workforce. However, this extreme dependence on a single industry has long been a risk.

For decades, Slovakia has operated as a low-cost manufacturing hub, assembling cars for foreign companies rather than developing its own high-value industries. Analysts have repeatedly warned that such an economic model is unsustainable, leaving the country exposed to external shocks—like tariffs. Trump’s move has merely accelerated a reckoning that was inevitable.

Slovakia exported €4.3 billion worth of cars to the US in 2023. With tariffs now in place, companies like Jaguar Land Rover have already paused shipments to America. While some predict a GDP decline of 1.5 percentage points by 2028, this also presents Slovakia with an opportunity to rethink its economic strategy.

Rather than relying on cheap labor for foreign automakers, Slovakia could use this moment to shift toward innovation, technology, and domestic entrepreneurship. The tariffs could force the country to diversify its economy—something leaders have neglected for decades.

Slovak Prime Minister Robert Fico, a pro-Trump European leader, failed to secure an exemption from the tariffs during his visit to Washington earlier this year. This has fueled criticism from his opposition, who argue he has ignored Slovakia’s economic vulnerabilities. His government’s response—waiting and hoping for a postponement—has not inspired confidence.

Meanwhile, his coalition partners are scrambling to shift blame, targeting the European Union instead of addressing the real issue: Slovakia’s economic overreliance on auto manufacturing. The government’s lack of preparation underscores the deeper problem—it has had decades to develop other industries but failed to act.