How US Trade Policy Shifts Impact Czech Businesses

The evolving landscape of global trade presents new challenges and opportunities for businesses worldwide. With the latest shifts in US trade policy, Czech exporters and investors must closely monitor potential changes that could influence market conditions. While the long-standing economic ties between the US and the EU remain a pillar of stability, increased tariffs, regulatory adjustments, and investment policy shifts may require strategic adaptation to maintain competitiveness.

One of the major concerns for Czech exporters is the possibility of increased tariffs on European goods. Certain key sectors, including aerospace, arms, and optics, may face tariffs ranging from 10% to 20%. Such measures could significantly impact Czech companies, particularly SMEs that may struggle to absorb these additional costs. This raises the urgency for businesses to enhance competitiveness through innovation, efficiency, and regulatory streamlining at home.

Beyond tariffs, another focal point of concern is the potential tightening of access to US technology. New export control rules for advanced AI chips and semiconductor technologies could pose challenges for European firms. Although these regulations are still under public consultation, securing a favorable classification for the Czech Republic within the framework of US technological partnerships will be crucial for maintaining access to cutting-edge innovations.

In terms of investment, the anticipated “America First” approach may accelerate the reshoring of production to the US. This could disrupt supply chains and affect Czech companies that are integrated into transatlantic manufacturing networks. While it remains too early to fully assess the impact, businesses should prepare for possible shifts by diversifying markets and strengthening their resilience against supply chain disruptions.

On the energy front, US policies aimed at maximizing oil and gas production could exert downward pressure on global energy prices. While this might benefit European industries struggling with high energy costs, the long-term impact on the renewable energy sector remains uncertain. Despite policy adjustments, clean technologies and sustainability initiatives continue to be strong pillars of industrial strategy in both the US and the EU.

The broader trade relationship between the US and the EU remains a key pillar of global commerce, with mutual trade in goods and services valued at over €1.54 trillion in 2023. For Czech businesses, the US remains the largest non-European export market, ranking 11th among trade destinations. With total bilateral trade turnover exceeding $10.7 billion, maintaining and strengthening market access remains a strategic priority. As the situation continues to evolve, Czech companies will need to remain adaptable and responsive to the changing trade environment.

Source: Ministry of Industry and Trade