Despite this pause, the final effective tariff for the US is unlikely to change dramatically from previously anticipated levels, largely due to provocations from China. As a result, the global economic outlook continues to trend downward, with global inflation pressures likely to be further exacerbated by the recent US-China trade war escalation. 

The announced tariffs should hit Asia the hardest, a predictable outcome given the region’s high level of integration in the production and export of goods to the US, which has resulted in a significant external surplus. The highest rates were initially levied on small countries such as Vietnam, Cambodia, Laos, and Sri Lanka, but soon escalated to China following its retaliation. 

For Central and Eastern Europe (CEE), the impact is more indirect and linked to the perspective of tariffs for Europe and Germany, as well as any macroeconomic deterioration there. The most vulnerable countries are Hungary and the Czech Republic, as they are highly integrated into the Germany-led EU automotive supply chain. By contrast, Romania and Poland appear more shielded, considering their less direct trade linkages.

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