Tariffs imposed by the United States on EU imports may dent Lithuania’s economic growth by 0.65 percent over three to four years, says Economy Minister Lukas Savickas.
“Generally, the direct effect, according to the calculations of our ministry, would certainly have an impact on our GDP decline, which could be up to 0.65 percent in the medium term, over three to four years,” Savickas told the radio Žinių Radijas on Thursday.
The impact of the tariffs on the Lithuanian economy would be “even more significant” if they were long-term, he said.
On Thursday morning, the Ministry of Economy and Innovation presented the first plan of measures worth 20 million euros to help businesses affected by the US tariffs to mitigate the impact of the trade war with the US and to help diversify markets.
“We need to diversify our markets and thus maintain our competitiveness,” said the minister.
According to the Ministry’s data, 1,041 companies export to the USA from Lithuania, mainly producers of high value-added products, petroleum products, furniture, and mineral exporters.
For about 100 Lithuanian companies, exports to the US account for more than half of their total turnover.
According to Minister Savickas, Lithuania is prepared to withstand the effects of the tariffs that US President Donald Trump rolled out this week.
“We are in a really strong position, the Lithuanian economy is growing exceptionally fast compared to the countries in the region. We have been preparing for such a scenario [...] and we are ready,” said the minister.
He says he hoped that the US and the EU, which is preparing retaliatory measures, will reach an agreement and that the tariffs will be lifted soon.
According to Savickas, the damage to Lithuanian exporters would be greatly reduced by the exemptions under consideration – the White House says it will not impose reciprocal duties on goods such as semiconductors, medicines, wood, copper, etc.
“The exemptions, if introduced, will be very favourable for us because almost half of our exports to the US are high value-added products. Pharmaceuticals and semiconductors would be very favourable exemptions for us,” said Savickas.
US President Donald Trump announced on Wednesday that he would impose a 20-percent general duty on imports from the EU.
He did not specify which specific goods would be subject to which specific duties.
Lithuania’s direct exports to the US account for around 6.8 percent of total exports of Lithuanian goods and amounted to 1.6 billion euros last year.
The Bank of Lithuania earlier announced that a possible trade war between the US and the EU would reduce Lithuania’s economic growth by 0.33–1.3 points over four years.
Trump announced on Wednesday tariffs on many countries around the world, calling it “Liberation Day”.
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