The Geoeconomic Repercussions of Trump’s Tariff Pause: A Balkan Perspective

On April 2, 2025, U.S. President Donald Trump announced sweeping tariffs under the banner of “Liberation Day”—a dramatic economic maneuver that reintroduced a 10 percent universal tariff on most imports to the U.S., along with new “reciprocal” country-specific duties. While media attention largely focused on superpowers like China and the European Union, business leaders in the Balkans should not underestimate the regional shockwaves.

From Serbia to Albania, this new tariff era could reshape trade routes, foreign investment strategies, and long-term economic diplomacy. Here’s how this policy shift will affect Balkan economies—and how business leaders can strategically respond.

A Snapshot of the New Tariffs

• Baseline Tariff: 10 percent on most imports to the U.S. (exceptions under urgent negotiation include Canada, Mexico, and selected strategic partners like the UK, Japan, and South Korea).
• Reciprocal Tariffs: Country-specific duties based on assessed trade imbalances:
  • China: 145 percent
  • EU countries: 20 percent
  • Serbia: 37 percent
  • Bosnia and Herzegovina: 35 percent
  • North Macedonia: 33 percent
  • Albania, Montenegro, and Kosovo: 10 percent

However, following significant market volatility and global pushback, President Trump announced a 90-day pause on the implementation of the elevated “reciprocal” tariffs (above the 10 percent baseline) for all countries except China. This pause, effective from April 9, 2025, is intended to provide a window for negotiations and adjustments.

When giants fight, the small must strategize

While direct Balkan exports to the U.S. are relatively modest compared to the EU or China, the region is deeply embedded in global supply chains, particularly through EU hubs. The risk lies not just in direct tariffs—but in the second-order effects.

Balkan manufacturers often supply components to German, Italian, or Austrian firms. If U.S. tariffs depress EU exports, the ripple effects will reach Serbian automotive plants, electronics assemblers in North Macedonia, and Bosnian metalworks.

Mapping the Balkan impact: Country insights

Serbia (37 percent tariff)

• Key exports: Automotive parts, electrical equipment, machinery.
• Exposure: High. Serbia’s integration into European automotive supply chains makes it vulnerable if EU car exports decline.
• Strategy: Serbia should deepen trade ties with China, UAE, and Central Asian economies, and push for stronger CEFTA-driven regional supply networks.
• IMF Economic outlook: While Serbia’s economy is projected to grow by 3.5 percent in 2025, this marks a slight deceleration from previous estimates. The IMF attributes this to factors including regional instability and the broader impact of global trade tensions

Bosnia and Herzegovina (35 percent tariff)

• Key exports: Metal products, textiles, furniture.
• Exposure: Moderate. Many exports undergo final assembly or branding in the EU before reaching the U.S.
• Strategy: Expand nearshoring opportunities with Middle Eastern and Turkish buyers, particularly in textiles and furniture sectors.

• IMF Economic outlook: The IMF maintains a steady growth forecast of 2.8 percent for 2025, reflecting stable domestic demand and ongoing structural reforms.

North Macedonia (33 percent tariff)

• Key exports: Electrical equipment, chemical products, pharmaceuticals.
• Exposure: High-tech zones dependent on European FDI could see disruptions.
• Strategy: Boost domestic R&D and foster value-added exports to reduce dependency on EU re-export models.
• IMF Economic outlook: The IMF has revised North Macedonia’s 2025 GDP growth projection downward to 3.2 percent, citing external pressures and potential disruptions in trade flows. ​

Albania, Montenegro, Kosovo (10 percent tariff)

• Key exports: Minerals, energy, agricultural goods, textiles.
• Exposure: Lower, but still indirectly at risk due to EU slowdown.
• Strategy: Leverage their lower tariff status to position themselves as alternative sourcing hubs for U.S. businesses looking to bypass higher-cost EU imports.
• IMF Economic outlook:  Albania: Demonstrating robust economic momentum, Albania’s GDP is expected to expand by 3.8 percent in 2025, supported by strong performance in tourism, construction, and services sectors. ​Montenegro: The IMF projects a 3.2 percent growth rate for Montenegro in 2025, underpinned by sustained investment and a rebound in the tourism industry. ​ Kosovo: With a forecasted growth of 4 percent in 2025, Kosovo is poised to benefit from increased diaspora investments and a burgeoning services sector. ​

Croatia and Slovenia (EU Members, 20 percent tariff)

• Though often seen separately, Croatian ports and Slovenian logistics hubs are critical for regional trade.
• Impact: A slowdown in U.S.-EU shipping could bottleneck regional supply chains, affecting Balkan exporters’ access to global markets.
• IMF Economic outlook:  Croatia: The IMF projects Croatia’s GDP growth at 3.1 percent in 2025, following a robust 3.8 percent expansion in 2024. This growth is driven by strengthening household real incomes and investment supported by EU funds. However, inflation is expected to remain elevated at 3.7 percent in 2025, reflecting robust wage growth. ​Slovenia: Slovenia’s economy is anticipated to grow by 1.8 percent in 2025, with inflation projected at 2.6 percent. The moderate growth level reflects the country’s integration into EU supply chains and its exposure to global trade dynamics. ​

Global investment and geopolitical shifts

China’s growing footprint in Southeast Europe

With U.S.-EU ties fraying, Chinese firms are likely to accelerate investments in Balkan infrastructure—railways, energy grids, and logistics—using the region as a low-cost European gateway. However, deeper Chinese engagement could complicate EU accession negotiations, especially for Montenegro and North Macedonia.

Risks to U.S. trade ties

American companies sourcing materials, tech labor, or manufacturing inputs from the Balkans may re-evaluate their strategies unless exceptions, waivers, or bilateral deals are swiftly negotiated.

Building resilience: Strategic priorities for Balkan businesses

However, the temporary 90-day pause on the U.S. “Liberation Day” tariffs introduces a window of opportunity. During this period, Balkan countries can strategize to mitigate potential adverse effects, diversify trade partnerships, and strengthen economic resilience.

1. Diversify Export Markets: Build stronger links with MENA, Central Asia, and Sub-Saharan Africa to offset EU/U.S. exposure.
2. Enhance Supply Chain Agility: Invest in digitalization, AI-driven logistics, and regional warehousing to pivot quickly amid trade disruptions.
3. Strengthen Regional Integration: Deepen CEFTA partnerships, advocate for expanded cross-border investment treaties, and support regional infrastructure projects.
4. Engage in Smart Diplomacy: Work with national authorities to lobby for sector-specific U.S. tariff exemptions and negotiate niche market openings.

From Shock to Strategy: How must the Balkans evolve?

The “Liberation Day” tariffs may be remembered as a historic rupture—or a short-lived policy experiment. Either way, for Balkan business leaders, the message is unmistakable: global trade stability can no longer be assumed.

Now is the moment to invest in flexibility, broaden strategic relationships, and align operations for a more multipolar world. Whether a company exports North Macedonian wine, Bosnian metals, or Serbian tech services—resilience, adaptability, and strategic foresight will define success in the new era.