Gabor Horvat: Europe faces serious dilemmas and must change quickly

Gabor Horvath

In light of the trade war declared by the American president against the entire world, Gabor Horvat, deputy editor-in-chief of the Hungarian newspaper Nepzsava, shared his thoughts on the future of democracy with a Newssky correspondent.

What could be the consequences of Trump's trade war for Europe?

It is difficult to imagine the long-term consequences of Donald Trump’s trade war, as his position and cause-and-effect relationships are changing. Most people have long lost track of what is happening and what is not. If he had maintained the tariffs he initially announced on steel, aluminum, cars, alcoholic beverages, etc., Europe would have faced serious dilemmas and would have been forced to change at lightning speed. The most important decision was whether to distance itself from the US and reorient itself to potentially new partnerships with China, India, etc. Trade in goods between the EU and the US last year amounted to about USD 976 billion, of which almost USD 370 billion were US exports. Of course, this does not include services, where the US has a significant advantage. Such volumes cannot be redirected quickly without restructuring industries and causing significant disruptions for member states.

The EU and the US negotiated a free trade agreement from 2013 to 2018, but during his first term, President Trump withdrew from the proposed Transatlantic Trade and Investment Partnership (TTIP). The EU and, surprisingly but not inexplicably, Elon Musk would have been happy to return to the negotiating table and discuss a zero-tariff policy. However, the White House has shown no sign of supporting the idea.

Does the EU have the desire and ability to replace the US with other countries as a trading partner?

The time is coming when the EU will have to decide whether it will try to survive a second Trump presidency and hope for improvements from 2028, or prepare for a long and cold winter in trade relations. In any case, the EU remains a strong promoter of free trade and continues to negotiate such agreements with several countries, from Jamaica and Fiji, via Zimbabwe to Canada.

As the United States voluntarily takes a significant step back from international trade, the EU will have significantly more incentives and opportunities to replace the US in some of its traditional trading relationships.

I don't see a replacement for the established countries in trade relations with the EU. The economies of alternative countries are much weaker than the core EU states and are not necessarily complementary to each other.

And what can we expect from Slovakia and Hungary?

Regarding Hungary and Slovakia, first, they must abandon EU membership, and such a false step would immediately destroy their economies and cause the collapse of their current governments.

As for Hungarian Prime Minister Viktor Orban, at a recent "town meeting" he casually mentioned the option of leaving the EU, and then listed several reasons why it should not be done now.

In short, it is in Hungary’s best interest to stay in the EU. He didn’t say so, but according to a recent poll, 79 percent of Hungarians support EU membership, and only 16 percent want to leave. Orban is a gambler, but he is not a fool.

Communicated Maryna Kovalchuk, Deputy Editor-in-Chief (Central Europe and Canada), Project Manager, V5 Media