Economist: Trump’s Tariffs Will Affect the Western Balkans Indirectly

Belgrade (BETAPHOTO/MILOS MISKOV)

The tariffs imposed by US President Donald Trump will affect the Western Balkan countries indirectly, through a reduction in their exports to the EU market, and the consequences could be relatively mild, with gross domestic product (GDP) in the region slowing down by 0.4 to 0.9 percentage points, according to an analysis by Branimir Jovanovic, an economist of the Vienna Institute for International Economic Studies.  

The impact of tariffs could be greater, but the governments of the Western Balkans have the tools and opportunities to act and prevent more serious consequences. The analysis, published on the blog of the Balkans in Europe Policy Advisory Group (BiEPAG), stresses that the amount of tariffs imposed varied by the countries in the Western Balkans, with Serbia facing the highest, 37 percent.

The calculation method applied has drawn criticism from economists, because the US has deficits in bilateral trade with Serbia, Bosnia and Herzegovina and North Macedonia, which is the reason these countries were imposed higher tariffs. But, according to the statistical offices of these three countries, their imports from the US is larger than their exports, which means that the tariffs for these countries should also be 10 percent.

More concerning is the region’s exposure to the EU market - exports to the EU accounts for almost half of North Macedonia’s GDP, around one fourth of Serbia’s and Bosnia and Herzegovina’s GDP, 13 percent of Albania’s, and about three percent of GDP of Kosovo and Montenegro, which is still more than their exports to the USA. “This means that the Western Balkan countries will feel the consequences of the trade war indirectly, through the reduction of their exports to the EU”, according to the economist.