As the European Union faces the prospect of considerable new tariffs imposed by the United States starting April 2, under the administration of President Donald Trump, Romania is at a crossroads in terms of economic and trade expectations, according to an analysis by Banca Transilvania.
The 25% tariffs on European automobiles, pharmaceuticals and semiconductors, so far only proposed by the Trump administration, could have serious consequences for Romania, given its growing industrial base, integration into EU supply chains and direct trade with the US.
But while these tariffs pose risks to key Romanian industries, they could also bring opportunities for strategic economic adjustments, says Ioan Nistor, the bank’s chief economist.
Romania’s trade situation and vulnerability to US tariffs
Romania is a medium-sized economy within the EU, depending significantly on intra-European and international trade. In recent years, Romania’s exports to the United States increased, especially in sectors such as automotive components, pharmaceuticals, electronics, and agricultural products.
In 2024, Romania’s total exports to the US exceeded USD 2 billion, consolidating the position of the US as one of Romania’s most important non-EU trading partners. At the same time, Romania imports energy products, high-tech equipment, medical devices and defense technologies from the US.
However, Romania’s deep integration into European industrial chains makes it vulnerable to any disruption to trade between the EU and the US. Since Romania provides auto components, pharmaceuticals and electronic parts to major European economies such as Germany and France, any slowdown in these due to US tariffs could affect Romania’s production, jobs and economic growth, particularly at a time when our country’s trade balance is deteriorating.
The direct impact of US tariffs on Romanian industries
- Automotive industry: risk of decline
One of the most affected sectors in Romania could be the automotive industry, which plays a key role in the country’s economy. Romania is home to major car manufacturers, as well as numerous car parts providers that supply factories in Germany, France and Italy.
If the US imposes 25% tariffs on EU vehicles and car parts, American demand for cars produced in Europe will decrease, which would affect Romania’s production and exports.
Romanian suppliers of automotive components and electrical systems, which support the automotive industry in Germany and France, could also lose orders if European manufacturers reduce their production due to weaker demand in the US.
- Pharmaceutical industry: mixed impact
Romania’s pharmaceutical sector is strong, with top manufacturers exporting to global markets, including the U.S. If tariffs increase the cost of European drugs in the U.S., Romanian pharmaceutical companies could become less competitive.
However, considering the high demand for affordable generic drugs, American importers may continue to purchase Romanian pharmaceuticals due to lower costs.
If the EU decides to retaliate with tariffs on American pharmaceutical products, this could lead to higher prices for some medical equipment imported from the US, affecting costs in the Romanian healthcare system.
- Electronics sector: moderate risk
Romania attracted foreign investment in electronics production, with numerous companies having production facilities in the country.
US tariffs on electronic components could impose restrictions on access to the US market, affecting the revenues of the sector – Romania’s largest exports to the US were in the categories of electrical and electronic appliances and their component parts, with a value of over EUR 480 million in the first 11 months of last year.
On the other hand, the US is seeking to reduce its dependence on semiconductor imports from China. This could lead to greater US investment in alternative markets, and Romania could attract more foreign direct investment (FDI) in this area, as a lower-cost manufacturing destination in the EU.
The indirect impact of US tariffs on Romania
1. Decline in trade with Germany and France
Since Romania supplies parts and components to industries in Germany and France, any reduction in their exports to the US would lower demand for Romanian-made goods. This could lead to lower production, job losses and slower economic growth.
2. Slowdown of EU economy
If US tariffs affect the entire European economy, Romania’s GDP growth could be slowed due to reduced foreign investment, decline in industrial production and diminished consumer confidence.
3. Rising prices for US imports
If the EU imposes retaliatory tariffs on American goods, the prices of US imports could increase in Europe and therefore in Romania, affecting energy products (gas, oil, fuels), aircraft and medical equipment.
This would lead to higher costs for Romanian companies and consumers, especially in the fields of energy and transport.
Opportunities for Romania in the face of these trade changes: despite challenges, Romania could benefit from shuffling trade routes and investments as a result of US tariffs
- Diversification of trading partners
If EU exports to the US decline, Romania could expand trade relations with alternative markets, such as China, India and the Middle East.
Romania’s agricultural, pharmaceutical and machine sectors could find new buyers outside the US.
- Attracting American investments to Eastern Europe
If tariffs cause production costs to increase in Western Europe, some American companies could relocate production to lower-cost countries in the EU, such as Romania.
This could bring new jobs and investments, especially in technology and manufacturing.
- Romania’s role in EU trade policy
Romania could play an active role in negotiations between the EU and the US, supporting measures that protect the country’s key industries.
If the EU tries to compensate for trade losses with the US by strengthening domestic supply chains, Romania could benefit from increased intra-EU trade and investment.
Conclusion: A mixed outlook for Romania
The US-imposed tariffs on EU products will create economic challenges for Romania, especially in the automotive, pharmaceutical and electronics industries, shows the analysis made by Banca Transilvania.
Even though it is not as exposed to tariffs as Germany or France, Romania will feel the indirect effects through supply chains, reduced investments and the slowdown of the European economy.
However, Romania has opportunities to adapt, by diversifying trade partners, attracting new investments and taking a more active role in EU trade policy. The success of these adjustments depends on the ability of the government and the private sector to navigate the new geopolitical and commercial realities, concludes Ioan Nistor, BT’s chief economist.
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