Trump’s tariffs will postpone expansions in automotive, battery sectors in Hungary

Car Automotive Industry
Illustration: Unsplash / Lenny Kuhne

Senior analysts believe President Trump’s tariffs will postpone the start and volume increase of large investments in Hungary’s industrial sector, especially in the automotive and battery segments. That is the consequence of the fact that Hungary’s economony is very dependent on the German automotive sector hit hard by the new tariffs.

As a result, the new automotive and battery plants will start production or production volume increase only in 2026 or later, g7.hu suggests in an article. That comes after KSH‘s latest Hungarian February industry data.

Output of Hungary’s industrial sector fell 8.7pc in February, a first reading of data released by the Central Statistics Office (KSH) on Friday shows.
Output dropped 8.0pc when adjusted for the number of workdays. KSH said production volume decreased in all manufacturing branches compared to the same month of the previous year. Output of the vehicle manufacturing and the electric equipment segment declined significantly. The decline was more moderate in the computer, electronics and optical equipment segment and the food, drink and tobacco segment.

Trump's tariffs and Orbán
Trump and Orbán before the elections. Photo: MTI

In a month-on-month comparison, output slipped a seasonally- and workday-adjusted 1.3pc. KSH will release detailed data on output of industrial sector branches for the month on April 11. Commenting on the fresh data, the National Economy Ministry said domestic economic trends are developing favourably, but industrial performance is being held back by weak external demand.

Ministry points on Germany

The ministry said the European Union’s competitiveness problems and the two-year recession in Germany, Hungary’s most important economic partner, are holding back exports and industrial output. The negative effects through supply chains are particularly affecting the automotive and mechanical engineering industries in Hungary.

In addition to the recovery of external markets, big investments by CATL, BYD, BMW, SEMCORP and EcoPro in the pipeline could give new impetus to Hungary’s industrial sector, the ministry said.

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