Part I — Situation overview

US President Donald Trump, in a Truth Social post on 1 May 2026, announced that as of next week he is raising the US import tariff on cars and trucks coming from the European Union from 15 to 25 percent. According to his justification, the European Union ‘is not keeping’ the conditions of the previously concluded trade agreement. The announcement came after the spring series of negotiation failures (NATO tensions, the European rejection of the US military operation against Iran); the European Commission signalled the same day that it is preparing a counter-package. The American president emphasised: the tariffs do not affect European companies producing in the United States — which indirectly is pressure on production relocation (according to articles in Telex and ATV, he referred to ‘American workers staffed’ new plants).

The three most exposed EU countries are Hungary, Slovakia and Sweden — directly named both by the American press reporting and domestic analyses (Telex, ATV, Portfolio). The extent of Hungarian exposure depends primarily on the export structure of the four big car plants — Audi Győr, Mercedes-Benz Kecskemét, BMW Debrecen, Suzuki Esztergom; in Debrecen, a significant share of the electric models launched in 2024 (BMW iX3 generation) is from the start oriented to the US market, as are the EQE models in Kecskemét. The Tisza government — which, after the announcement of the new ministers, is now preparing for handover around the 9 May 2026 inaugural sitting — is therefore in its first days facing an external shock whose effect, through employment, tax revenue and regional economic activity, may shape Hungary’s entire medium-term economic policy.

In MIAK’s reading, this is not a step targeting a single member state, but another stage of a long transformation: the global trade system, with the unpredictable decisions of the United States, is increasingly unsuitable for a small open economy to build its exports on a single buyer — the character of the problem is structural, not merely cyclical.

Part II — Scholarly grounding

Before turning to MIAK’s concrete proposals, it is worth fixing the scientific frame in which the impact of the 25 percent tariff can be interpreted. Joseph Stiglitz, Nobel laureate economist (Columbia University), in Globalization and Its Discontents describes beggar-thy-neighbor policies as a regular feature of 20th-century economic crises: if a large economy protects its own market with tariffs, smaller partners absorb the shock. Ha-Joon Chang, South Korean-British economist (Cambridge), in 23 Things They Don’t Tell You About Capitalism shows historically that the United States and Britain themselves used infant industry protection in the 19th century — today’s American rhetoric thus collides with its own past practice. Paul Krugman, American economist (City University of New York; 2008 Nobel Memorial Prize in Economic Sciences), in The Return of Depression Economics analyses how an export decline in a small open economy triggers multiplicative effects through employment and domestic demand — therefore stabilisation responses must be measured in days, not weeks. Detailed scholarly treatment — by author, with quotations — is in section 6.4 Scholarly grounding.

Part III — MIAK’s concrete proposal

MIAK proposes three measurable measures, in line with the logic of G9 Strategic industrial policy, G25 Energy-price-shock preparedness plan and FO3 Targeted re-skilling programme, that can be started already in the Tisza cabinet’s first hundred days.

3.1 Immediate job-stabilisation package (within 30 days)

For the four big factories and their attached supplier chain (mainly micro-, small- and medium-sized enterprises in Győr-Moson-Sopron, Komárom-Esztergom, Bács-Kiskun and Hajdú-Bihar counties) a short-time-work support (Kurzarbeit-model) should be ready within 30 days: if the factory documents an order decline, the state takes over part of the worker’s net wage from the employer — proposed at 60–70 percent — in exchange for not laying off. The funding source, in line with the logic of G15 Countercyclical fiscal stabiliser, should come from the reserves of the 2026 budget, with EU supplementation (taking the 2020 SURE model as a template). The programme should run for at most 12 months so that it does not become structural; the affected workers should during this same time take part in the targeted re-skilling under FO3 (towards new manufacturing areas — battery cells, semiconductors, EV service network).

3.2 Joint EU action and interest-representation priority (within 60 days)

After the 9 May 2026 inauguration, the Hungarian cabinet should immediately request ministerial-level consultation with Berlin and Paris. The fate of the four Hungarian factories cannot be defended in isolation: the Hungarian position must be aligned with the German (Volkswagen, BMW, Mercedes) and French (Stellantis) interests — this is the principled basis of KP4 Principled pragmatism and KP8 Economic-diplomacy integration. The Hungarian position should be neither US-conciliatory nor rhetorically confrontational; it should be matter-of-fact, quantified and clear: a concrete Hungarian export-data block in the Commission’s counter-package negotiating folder, and we ask for prior negotiation of the exemption procedure for Hungarian factories (the conditions of the American ‘companies producing in the United States’ exception should be clear). This 60-day period closes before the late June 2026 EU summit — a concrete, measurable success (‘Hungarian export data officially appear in the justification of the counter-package’) is achievable.

3.3 Medium-term export diversification and manufacturing depth (12–24 months)

The problem of Hungarian export exposure did not arise in May 2026 and will not be solved with one decision. Within the framework of G9 Strategic industrial policy data-driven sector identification, three parallel paths offer themselves to the Hungarian automotive cluster. (a) Geographical diversification: bilateral agreements with Asian (Chinese, Korean, Vietnamese) and Latin-American partners through the state development bank (G10) can open new markets for Hungarian suppliers. (b) Functional deepening: instead of traditional final assembly, the production of higher value-added components (battery cells — the BYD Szeged project, semiconductors, control electronics) makes tariff exposure proportionally lower, because not all of these cross the border in the final product. (c) Service integration: EV service, battery recycling and leasing platforms build Hungarian competitiveness at European level. The three paths do not compete with each other — in a comprehensive industrial-policy framework all three can be pursued in parallel.

The three proposals are linked by the principle of data-drivenness and rapid decision-making: the government does not react to ad hoc daily press announcements, but takes graduated measures based on the real state of Hungarian factories and the supplier chain (order book, working-hours utilisation, regional employment).

Part IV — Expected effects and risks

Dimension Expected effect Risk
Economy The tariff shock can in the short term cause a 2–4 percentage-point (pp) GDP-share decline of Hungarian auto exports if orders fall by 30–40 percent. The stabilisation package mitigates the spread (multiplier-effect reduction). If the government takes a ‘fundamentalist free-trade’ position and does not act, the GDP share of affected regions can fall persistently. If it spends too sector-specifically, it diverts funding from other sectors.
Society Short-time-work support pre-empts mass layoffs; targeted re-skilling moves people into higher value-added jobs. Employment shock may affect mid-structure families. If the support does not convert to training and remains only passive wage support — ‘organized abandonment’, that is, postponed abandonment of the task on the worker’s side.
Public administration Real-time linking of NAV, NEAK and employment-office data (G1 Data-driven budget) allows more accurate targeting of measures. In case of administrative-coordination error, support does not reach supplier SMEs — only the big factories — distorting industrial-policy priorities.
Foreign policy Constructive Hungarian position strengthens the joint EU line, improves Hungary’s standing in Berlin and Paris — also important in the context of unfreezing-EU-funds talks. Excessive leaning to the US side worsens relationships with member-state allies; an excessively rhetorical EU line worsens transatlantic talks.

The main dilemma is clear: the stabilisation package may produce a temporary breach of the budget deficit target (under G15 countercyclical-stabiliser rule, this is acceptable in a near-recessionary situation), and the support must be tied to a quality access condition — only the supplier that documents an order decline gets it. The proposal tilts to the risk side if support becomes a political favour and the data-driven conditions are not maintained; the public-funds dashboard under G1 and the Drucker audit (G20) jointly can prevent this.

Part V — Measurability and summary

5.1 What is worth tracking? (proposed key performance indicators — KPIs)

  • Value of Hungarian auto-industry exports to the US (monthly, KSH and Eurostat) — substantively meaningful in 6 months, sufficient for judgment in 12 months.
  • Monthly change in registered job-seekers in the three affected counties (Győr-Moson-Sopron, Bács-Kiskun, Hajdú-Bihar) — the fastest feedback on the success of the stabilisation package.
  • Share of supplier-SME support uptake relative to the four big factories — if 70–80 percent of support reaches only the big factories and suppliers are left out, this signals an administrative problem.
  • Hungarian export data appearing in the EU counter-package (yes/no) — binary metric of the 60-day diplomatic success.

5.2 Summary

MIAK’s request to the Tisza cabinet and the public: in the first days of the 25 percent American auto tariff, the response should be not mood-driven but data-driven. The triad of job stabilisation (short-time-work support), joint EU action (Berlin-Paris coordination) and medium-term diversification (geographical and functional), appearing on a single government agenda, provides the structural answer. In this topic, two MIAK foundational values move at the same time: data-drivenness (support must be granted based on actual order decline, not on political situational sense) and openness (the response of a small open economy can never be formulated by turning inward — partnership with German and French interest groups must be an organic part of member-state politics).

Part VI — Reasoning and further sources

6.1 Press framing across the spectrum

The centre-left band (Telex, HVG, 24.hu, 444.hu) reported in a fact-stating manner emphasising Hungarian exposure: Telex (Vilmos Weiler’s article) placed the news in the context of the European Commission’s counter-package; HVG and 24.hu highlighted the duality of the American workers narrative (the reverse side of the ‘protectionism as job protection’ rhetoric: that this comes at the expense of the Hungarian worker). The current-affairs and economic band (Portfolio) analysed the affected factories and the market impact of the counter-package; two Portfolio articles dealt with the topic — one focused on the American tariff move, the other on the EU counter-response. The conservative/pro-government band (Magyar Nemzet — did not bring the topic to top focus on this day; Mandiner) chose the ‘Trump hit Europe’s weak spot’ framing — this band traditionally portrays the American president’s economic-policy initiatives more positively, but is also more cautious here because of the magnitude of auto-industry exposure. ATV — uniquely — already on the headline of 2 May 2026 explicitly placed Hungarian exposure on the front page (‘Trump announced harsh tariffs, putting Hungary in a difficult position’), highlighting the regional impact.

6.2 Facts and data

  • The Hungarian auto industry contributes a defining share of manufacturing output; direct auto-industry employment is around 190,000 people, including the supplier chain over 350,000 (KSH 2025 data).
  • The Hungarian auto industry generated about EUR 35 billion of exports in 2025 (Eurostat, by commodity-group breakdown), a substantive part of which goes to the US.
  • Raising the existing 15 percent tariff to 25 percent represents a 10 percentage-point competitive disadvantage for Hungarian exporters in the American market — the consumer-price impact depends on price pass-through, but experience shows 50–70 percent reaches the consumer, the rest reduces the exporter’s profit margin.
  • The European Commission signalled on 1 May 2026 that it is preparing a counter-package — in past instances (2018, 2025) the EU always acted within 2–6 weeks.

6.3 Policy angles

  • Economy (programme points) — export diversification (G9), state development bank (G10), countercyclical stabiliser (G15), data-driven budget (G1), Drucker audit (G20).
  • Employment policy (programme points) — targeted re-skilling programme (FO3), employment data platform (FO1), countercyclical employment fund (FO7).
  • Foreign policy (programme points) — principled pragmatism (KP4), economic-diplomacy integration (KP8), crisis-management protocol (KP7).

6.4 Scholarly grounding

6.4.1 Joseph Stiglitz: Globalization and Its Discontents

In his globalisation book, Stiglitz analyses in detail the beggar-thy-neighbor policies, which he interprets as a lesson from the great crisis of the 1930s:

“The beggar-thy-neighbor policies of the 1930s, as is well known, played an important role in the spread of the Great Depression. Every country hit by the recession tried to bolster its own economy by imposing restrictions on imports, pushing consumer demand toward its own products. […] As each country reduced its imports, it ’exported’ the economic crisis to its neighbours.”

Globalization and Its Discontents discusses at length how tariff and customs policy in different decades of the 20th century became the surface mover of structural imbalances — the 25 percent American auto tariff in the case of Hungarian export exposure reproduces precisely this classical pattern: the shock is absorbed by a small open economy primarily through its employment, therefore the defensive measure also has to start on the employment side.

📖 Source: Joseph Stiglitz: Globalization and Its Discontents

6.4.2 Ha-Joon Chang: 23 Things They Don’t Tell You About Capitalism

In Chang’s historical analysis, Chapters 7, 12 and 23 are decisive: they examine the relationship between free trade and tariff protection in the light of the 19th-century practice of the developed countries themselves:

“Many of the rich countries themselves applied high tariffs and active industrial policy in the 18th–19th centuries to protect their nascent industries. The United States, between 1820 and 1945, was the most protectionist large economy in the world — tariff levels at times exceeded 40–45 percent.”

Chang’s argument — infant industry, that is, nascent-industry protection — directly concerns the present situation: the American rhetoric (‘American workers staffed’ factories) repeats the 19th-century pattern of its own historical practice, only standing on the other side. The Hungarian response, read from here, does not lament a moral duality, but defends the strategic scope of member-state industrial policy (G9): if the US allows itself strategic-sector support, then there is also room for Hungarian planning to do so with the auto industry and new attached industries.

📖 Source: Ha-Joon Chang: 23 Things They Don’t Tell You About Capitalism

6.4.3 Paul Krugman: The Return of Depression Economics

Building on his international-trade theoretical works and monetary-macroeconomic analyses, Krugman in The Return of Depression Economics discusses in detail how a trade shock from a large partner reaches small open economies in a multiplicative way through employment and domestic demand:

“In a small open economy an export decline does not stop at the boundary of the export sector. The decline in workers’ earnings holds back domestic consumption, suppliers’ orders fall, and the effect spreads to non-exporting service sectors as well. That is why the stabilisation response has to be measured in days, not weeks.”

The Krugman multiplier argument directly justifies why proposal 3.1 (short-time-work support) should start within 30 days and not after six months: every week the stabilisation is delayed, the effect spreads more widely, and the damage surface grows exponentially.

📖 Source: Paul Krugman: The Return of Depression Economics

6.5 International comparison

The German response (Volkswagen, BMW Group financial position) will rely on rapid activation of Kurzarbeit — short-time-work support; the model proved itself in the 2008–2009 and 2020 pandemic shocks. The French government, because of Stellantis exposure, activates its own industrial-policy framework. The Hungarian response is good if it starts with the same scheme but within Hungarian financial frames and plugs into an SURE-style EU financial fund. The American-side experience — the impact of the 2018 steel and aluminium tariffs — shows that the affected industries experience an order decline in the short term, while in the medium term production relocation (investment in the US) accelerates; Hungarian planning therefore has to weigh this too, so that we do not stay at the level of final assembly.

Economy

  • G1 — Data-driven budget
  • G9 — Strategic industrial policy
  • G10 — State development bank
  • G15 — Countercyclical fiscal stabiliser
  • G20 — Economic-policy impact-assessment system (Drucker audit)
  • G25 — Energy-price-shock preparedness plan

Employment policy

  • FO1 — Employment data platform
  • FO3 — Targeted re-skilling programme
  • FO7 — Countercyclical employment fund

Foreign policy

  • KP4 — Principled pragmatism doctrine
  • KP7 — Foreign-policy crisis-management protocol
  • KP8 — Economic-diplomacy integration

Proposed new programme point: External-economic shock protocol — sector-specific stabilisation procedure for trade-tariff shocks — for the joint area of Economy and Employment policy (operational protocol of the G15 and FO7 combination).

6.7 Source register

Press sources (MIAK press monitor, 2 May 2026 — topic 1):

Knowledge-base references (books):

  • 📖 Joseph Stiglitz: Globalization and Its Discontents
  • 📖 Ha-Joon Chang: 23 Things They Don’t Tell You About Capitalism
  • 📖 Paul Krugman: The Return of Depression Economics

MIAK internal materials:

  • MIAK policy area: Economy (programme points; programme-point ID: G9, G15)
  • MIAK policy area: Employment policy (programme points; programme-point ID: FO3)
  • MIAK policy area: Foreign policy (programme points; programme-point ID: KP4, KP8)
  • MIAK press monitor, 2 May 2026 — topic 1, score: 95/100

Additional public data sources:

  • KSH industrial-production and external-trade statistics (monthly)
  • Eurostat — Hungarian auto-industry exports to US (Comext)
  • ACEA annual report — European automotive association data
  • OECD Economic Outlook 2026

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