PRAGUE, July 29 (Xinhua) -- A baseline tariff of 15 percent on European Union (EU) goods agreed by the bloc and the United States could slightly dampen the growth of the Czech economy, the Czech Ministry of Finance said on Tuesday.
According to a preliminary estimate by the ministry, the tariffs could reduce Czech gross domestic product (GDP) growth by 0.2 percentage point this year and by 0.39 percentage point in 2026.
However, the ministry stressed that this does not automatically mean a slowdown in real GDP growth, as the negative impacts can be offset by other developments. These include improved domestic economic performance in 2025 and the expected positive impact of the German fiscal package in 2026.
Nevertheless, Czech economist Ilona Svihlikova offered a more cautious outlook. "Many details are still being finalized, including tariff levels in the pharmaceutical and agricultural sectors," she told Xinhua. "My estimate is that the impact could be as high as a 0.5 percentage point decline in GDP growth this year alone."
Although the Czech Republic has limited direct trade ties with the United States, she said, the indirect impact through Germany could be significant. "German companies are likely to pressure Czech suppliers to lower prices to offset the tariffs, which may be difficult due to high energy costs in the Czech Republic," she warned. "This could also result in downward pressure on wages."
Svihlikova also pointed to the continued high tariffs on steel and aluminum. "Some Czech companies are already considering relocating production to the U.S.," she said.
As a small, export-driven European economy, the Czech Republic has close industrial links with Germany, its largest trading partner. Enditem
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