Serbia has failed to reach an agreement with the United States (US) regarding the rate of new tariffs, which are set to come into force on 7 August and could reach as high as 35% on Serbian exports to the US.
This rate is among the highest on the list of affected countries, even higher than that imposed on the US’s main trade rival, China, which stands at 30%. The European Union managed to negotiate tariffs capped at 15%.
The Serbian Chamber of Commerce (PKS) said they are disappointed with this decision by the US administration, especially considering that, according to data from the Republic Statistical Office, Serbia runs a trade deficit with the US, not a surplus as claimed by American authorities.
Therefore, Serbia should not even be on the US “blacklist”.
A Danas daily source, who wished to remain anonymous, believes the new tariffs are likely a political message and punishment for Serbia’s partnership with Russia.
They recalled that the US had in the meantime issued an ultimatum to Moscow to sign an agreement with Ukraine by 8 August, under threat of imposing tariffs of up to 100% not only on Russia but also on its partners – especially those that continue to import Russian goods and energy.
Although Serbia does not import Russian oil, natural gas still comes from Russia, which, according to Danas’ source, could pose an additional risk to Serbia’s economy.
They also added that the tariff negotiations with the US were led by representatives of the Serbian government, with the mediation of lobbyists, in a similar fashion to the case of sanctions against the Petroleum Industry of Serbia (NIS).
The Danas daily source also pointed to Serbian President Aleksandar Vučić’s statement that he does not believe there will be any further delay in US sanctions on NIS, noting that the president’s remark was not accidental, as the US is gradually “tightening the grip” around Russia. This is further evidenced, they say, by the recent withdrawal of NIS from the Bulgarian market.
On the other hand, some Serbian producers who export goods to the US told Danas they are considering relocating production abroad. They stressed that in certain industries, under these export conditions to the US, manufacturing in Serbia will no longer be viable.
700 companies affected, mostly in the rubber and defence industries
Bojan Stanić, Assistant Director of the Sector for Strategic Analyses, Services, and Internationalisation at the Serbian Chamber of Commerce (PKS), says the US decision to impose a 35% tariff has caused concern among domestic businesses, especially since it comes despite previous arguments presented by Serbia during negotiations with the US.
“This morning we were able to find out via the White House website and global media, and by all accounts, all our arguments had already been submitted, and the result was simply pending. That result is now clear, and as previously announced, it amounts to 35%,” Stanić noted.
According to him, there is still a chance for negotiations in the remaining seven days before the decision comes into effect. He notes that there is also a possibility of changes after 7 August, given that the current US administration is known for reversing decisions.
“As of today, Serbia is among the most affected countries. Of the European countries, only Switzerland is above us. Compared to the initial announcement on 2 April, which proposed a 37% tariff, the current rate of 35% might seem softened, but realistically, we’ve been hit with a higher tariff than China, which received a rate of 30%. The European Union has been affected with a 15% rate,” Stanić explained.
According to him, this decision directly jeopardises the position of Serbian goods on the US market.
He pointed out that Serbian goods will now be more expensive compared to the competition, meaning domestic companies will face serious difficulties maintaining their presence in the US market.
“That’s why we’re disappointed, as economic relations between Serbia and the US have been on a strong upward trend in recent years,” Stanić said.
He noted that in the first six months of this year, total trade between Serbia and the US increased by 23%, with services also showing growth. He particularly highlighted the fact that US foreign direct investments in recent years have even exceeded those from Germany.
“All of this is now, in a way, being threatened by a political decision we see as unreasonable, especially considering that, according to statistics aligned with Eurostat, Serbia has a trade deficit with the US, not a surplus,” Stanić added.
When asked how many domestic companies are directly affected, Stanić said that around 700 firms export to the US.
He added that the most affected sectors will be: the automotive tyre industry, dominated by Chinese companies which, he says, will more easily find alternative markets; the defence industry; pet food; and parts of the processing industry such as construction components and metal equipment.
“It’s true that the US isn’t our most important market – it ranks 19th by export volume. But the issue is the indirect consequences,” Stanić warned.
He pointed out that the European Union, affected by a 15% tariff, will also lose some competitiveness, which will spill over to Serbia.
Stanić noted that Serbia’s most important foreign trade partner, Germany, is already forecasting slower growth in the coming years, with German companies like Audi, Mercedes, and Volkswagen already experiencing profit declines.
“All of this creates a climate of serious instability for the European economy, which is already under pressure from political risks due to the war in Ukraine, energy supply issues, labour shortages, and reliance on imported technology. In this context, the EU’s export competitiveness on the global market is decreasing – and let’s not forget, we are most closely tied to that market, as two-thirds of our exports go to the European Union,” Stanić concluded.
Relocating production one of the options?
Sanja Stanimirović, director of the company Testeral from Jagodina, highlights that the previous introduction of US tariffs of 50% on aluminium products has already seriously jeopardised the company’s operations. Testeral specialises in the production of aluminium and glass joinery and façades.
According to her, the US market accounted for as much as 70% of the company’s total exports, and that market is now nearly unsustainable for them.
“Business is going very badly. Sales in America have practically come to a halt, and not just because of us as exporters, but also because our buyers and clients in the US were waiting to see what would happen. Everyone knew that new contracts would include a clause transferring the cost of tariffs onto them,” Stanimirović explained.
She recalled that they had already endured one serious customs blow, adding that this is now an additional one.
Stanimirović pointed out that they already face a 50% tariff on aluminium, on top of an existing 5.7%. She added that other products, such as glass and fittings, are now subject to an additional 35% plus 5.7%.
“When we average it out, it means our products now enter the US with tariffs totalling around 46%. That is simply unsustainable,” she said.
Because of this, the company is already considering alternative models to continue exporting, with one of the options being the relocation of production.
“We might not be able to move production immediately, but it’s clear that it would now be more cost-effective to engage partners in Poland or Turkey to manufacture and export the products to the US under our supervision, rather than doing it from Serbia,” Stanimirović explained.
Asked whether they have considered changing markets, she added that the company quickly reorganised and turned to the domestic market.
According to her, they are currently primarily focused on Serbia, especially the Belgrade market, which she says is, for now, in good shape in terms of construction. She added that they are also operating across the country.
“We will now increase our share in the Serbian market slightly, but we also have some alternative markets. We’re already present in Switzerland, as well as Austria and Italy, and North Macedonia is now a new market for us,” said Stanimirović.
Although they have a flexible product that can be quickly adapted to different markets, she believes that losing the US market would be a serious blow.
“It would be madness for us to lose the US market, and we will do everything we can to reorganise and try to maintain our presence there. But production going directly from Serbia to the US, at least in our industry, is now virtually unsustainable,” Stanimirović warned.
(eKapija, 03.08.2025)