Customs wars: NBU explains how this will affect the Ukrainian economy

The increase in US duties on the Ukrainian economy will have a slight impact, due to the small volume of domestic exports to the American market. At the same time, some Ukrainian exporters may take the opportunity to redirect their supplies to other markets. This is stated in the Inflation Report of the NBU, writes UNN.

Details

It is expected that the direct impact of tariffs on the Ukrainian economy will be insignificant, as the volume of domestic exports to the American market is quite small. In addition, some Ukrainian exporters have the opportunity to redirect their supplies to other destinations, and some of them may gain competitive advantages in the same American market in the face of higher barriers to entry for other countries

At the same time, the NBU noted that an obvious consequence of trade confrontations will be a slowdown in economic activity in certain countries – Ukraine’s OTP, primarily in the Eurozone and Central and Eastern European countries.

And this may lead to a decrease in external demand for Ukrainian products. This was one of the reasons for the deterioration of Ukraine’s GDP growth forecast to 3.1% in 2025.

However, the NBU expects that the slowdown in OTP countries will be short-lived and will not have a long-term negative impact on the growth rate of Ukraine’s real GDP. In particular, the updated macro forecast envisages an acceleration of growth in both OTP countries and the Ukrainian economy in 2026-2027.

The NBU’s forecast also indicates that the structural features of the Ukrainian economy, in particular the high export of agricultural products, allow avoiding significant losses in sales markets.

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An additional factor of “stability” of the Ukrainian economy will be the adaptability of the entire domestic business to new challenges, whether it is difficulties with logistics or entering new sales markets. The best confirmation of this is the rapid and at the same time successful transformations of production, logistics and trade ties of Ukrainian enterprises during the full-scale invasion. Therefore, taking into account all these factors, the impact of tariff wars on the pace of economic recovery of Ukraine through the external demand channel should be limited and short-term

At the same time, according to information, the side effect of tariff wars may turn out to be long-term consequences for Ukraine — accelerating the process of deglobalization and the associated strengthening of geopolitical polarization of countries.

As a result of the acceleration of geopolitical polarization, the regionalization of the world will intensify, and incentives for the formation of not only new economic alliances, but also political and military blocs (formal or informal) will increase. A high degree of tension in the world may complicate the access of Ukrainian products to conditionally “unfriendly” markets, and the emergence of new “hot” spots may reduce attention to the Russian-Ukrainian war and support for Ukraine in general

AdditionUS President Donald Trump insisted on Thursday that the deployment of his new “reciprocal” duties “is going very well”, despite the fact that markets are falling and foreign leaders seem concerned about the prospect of a global recession.