Part I — Situation overview

On 23–24 July 2026 the President of the United States, Donald Trump, imposed a new protective tariff on practically all imported goods — according to the announcement at least sixty countries are affected, and the package takes effect within hours. The European Union received the move “in shock”; according to Kaja Kallas, the EU’s High Representative for foreign affairs, the American decision is baseless. The Hungarian and the international press unanimously framed the event as one of the most severe unilateral interventions in the global trade order. Protectionism — the protection of the domestic market with protective tariffs and import restrictions — has thereby returned to the policy of the world’s largest economy on a scale not seen for decades.

The move is not without antecedent: during Trump’s first and second terms too the tariff was the favoured economic-policy instrument, but the current package is considerably broader than the earlier targeted, country-specific tariffs — it follows an “everyone, everything” logic. This strains the global supply chains at several points at once. From Hungary’s viewpoint the stake is not abstract: the country is an export-driven economy strongly integrated into the German automotive chain. The exposure is dual. Directly it hits exports heading from Hungarian soil to the USA, and indirectly — and this is the graver channel — it ripples through to the Hungarian supplier network via the decline of German automotive demand. If fewer of the European cars that become more expensive on the American market sell, the supplier circle of Győr, Kecskemét and Debrecen feels it first.

An important public-law starting point, often blurred in the domestic debate: the common trade policy is an exclusive EU competence (Article 207 of the Treaty on the Functioning of the European Union, TFEU). No single member state — including Hungary — may conclude a tariff agreement with a third country on its own; the tariff response is negotiated by the European Commission with the Council’s authorisation, on behalf of the whole union. MIAK’s reading is therefore clear: the temptation for Budapest to seek a bilateral, “separate-path” bargain with Washington is not only a legally closed road but also a strategic error — the Hungarian interest is strengthened precisely by EU unity, not by breaking out of it.

Part II — Literature foundation

Before turning to MIAK’s concrete proposals, it is worth fixing the conceptual frame within which the tariff shock can be interpreted. Ha-Joon Chang’s (a development economist of South Korean origin, teaching at Cambridge) volume 23 Things They Don’t Tell You About Capitalism reminds us: the choice between free trade and protectionism was never a purely ideological question — today’s developed economies themselves built up their industry behind protective tariffs, so the tariff is neither inherently evil nor a miracle cure, but an instrument whose effect depends on the circumstances. Joseph Stiglitz’s (Nobel-laureate American economist, former chief economist of the World Bank) work Globalization and Its Discontents warns that sudden trade shocks without a safety net — regardless of who causes them — do serious social and employment damage, because the most exposed sectors have no time to adapt. And Henry Kissinger’s (an American diplomat and foreign-policy thinker of German origin) volume World Order gives the broader frame: open trade and a stable financial order are part of the institutional web of the Westphalian international order, whose unilateral termination erodes the rules-based world order itself. The detailed literature treatment — by author, with quotations — can be found in the 6.4 Literature in detail section.

Part III — MIAK’s concrete proposal

MIAK proposes three measurable measures which together aim to reduce exposure and increase adaptability — instead of bilateral bargaining.

3.1 Supporting a united EU stance (immediately, at the Council’s next session)

In the Council, Hungary must clearly support the united European tariff response, not a retreat from it. Since trade policy is an exclusive EU competence, Hungary’s room for manoeuvre lies not in concluding a separate bargain, but in shaping the common EU position according to Hungarian interests: the response measures (counter-tariff, WTO procedure, negotiating mandate) should be proportionate, targeted and avoid self-defeating escalation, which would also make Hungarian exports more expensive. This is the practical application of KP17 issue-based coalition-building: building a common interest bloc within the Council with the member states sharing automotive exposure (Germany, Czechia, Slovakia). Within the framework of KP8 economic-diplomacy integration, the Hungarian representation must underpin, with data-based exposure analysis, which EU counter-measures protect and which endanger the domestic supplier circle.

3.2 National supply-chain shock analysis and targeted SME protection (within 90 days)

The Ministry of Finance and the ministry responsible for economic planning should jointly prepare a sector-level exposure map: which Hungarian sectors, and with how much employment, depend directly or indirectly (through the German chain) on American demand. On the basis of the analysis, the most exposed small and medium-sized enterprises (SMEs) should receive targeted, time-limited (with a phase-out on a fixed timeline) transitional support — liquidity loan guarantees and retraining funds, not lasting price support. The aim is not to copy protectionism at home, but to buy adaptation time, precisely because — as the literature shows (see 6.4.2) — it is the sudden shock without a safety net that causes the greatest employment damage. The condition of the support should be measurable: an export-market-switching or productivity commitment.

3.3 Export-market diversification and moving up the value chain (in the next budgetary cycle)

In the medium term the only lasting protection is spreading dependence. Within the framework of G9 strategic industrial policy, Hungarian export promotion should be steered towards those sectors that produce higher value added (not mere wage assembly) and that supply several mutually independent markets — so that no single country’s tariff decision can upset the system. This connects to the G13 capital-markets-union programme too: for the diversifying investments, domestic SMEs must have access to capital-market financing beyond bank loans. The issue-based logic of KP17 also speaks outwards here: opening new, non-EU export markets through economic diplomacy.

These three proposals are bound together by a single principle: the Hungarian response to the global tariff war is neither closing-off nor a separate bargain, but standing by EU unity, paired with the conscious building of the domestic economy’s resilience. The risk of the tariff is not to be avoided but to be made bearable and survived — in such a way that the country becomes less vulnerable in structure in the meantime.

Part IV — Expected effects and risks

Dimension Expected effect Risk
Economy Targeted SME protection cushions the employment shock; diversification reduces single-market dependence Transitional support may harden into lasting price support; diversification is slow, does not protect for several years
Foreign policy A united EU stance increases Hungary’s bargaining position and allied credibility The EU counter-tariff may set off an escalation spiral that makes Hungarian exports more expensive too
Society Protection of jobs in the automotive regions, more predictable livelihoods Public opinion may expect the illusion of a “separate bargain”, which the law does not permit

The main deliberative question is the strength of the response. Too weak an EU reaction signals that the unilateral tariff can be applied with impunity; too strong a mirror-tariff-based response, however, further burdens precisely the chains carrying Hungarian exports, and also raises consumer prices. The proposal works if the EU stance is proportionate and targeted, and at home the transitional support really stays transitional — with an expiry date, that is, a moment fixed in legislation at which the support automatically ceases. The greatest internal risk is political: the protective tariff and the state safety net are popular in the short term, and therefore hard to phase out. This can be managed only by a pre-fixed, audited phase-out rule.

Part V — Measurability and summary

5.1 What is worth tracking? (proposed performance indicators)

MIAK proposes tracking the following performance indicators (KPIs) — these are proposed yardsticks, not government decisions:

  • The volume of Hungarian goods exports to the USA (KSH — Hungarian Central Statistical Office, quarterly) — the extent of the direct tariff effect within 6–12 months.
  • Export-market concentration: the share of the largest single destination country in Hungarian exports (KSH) — the yardstick of the success of diversification, with a declining trend as the target.
  • The survival and employment rate of the firms receiving targeted SME support after 12 months — the actual effectiveness of the protection.
  • The domestic value-added content of Hungarian exports (KSH/OECD TiVA) — the 24-month yardstick of moving up the value chain.

5.2 Summary

MIAK’s request to the decision-maker is clear: in the Council, Hungary should support the united, proportionate EU tariff response, and at home launch the supply-chain shock analysis and the targeted, phase-out-date-tied protection of the most exposed SMEs — instead of the false promise of a bilateral bargain, which the EU competence over common trade policy rules out anyway. The proposal moves two MIAK foundational values. Data-drivenness, because the targeting of protection is done on the basis not of lobbying strength but of a measurable exposure map — the support goes where the sector-level data shows the greatest risk. And universal representation, because the workers of the automotive supplier regions — not the loudest interest groups — stand at the centre of the deliberation.

Part VI — Justifications and further sources

6.1 The press framing by spectrum

The economic press (Portfolio) chose the factual frame concentrating on market consequences: the size of the package, the speed of entry into force and the effect on the global supply chains stood at the centre. The public-affairs-liberal band (HVG, Telex, 24.hu) highlighted the EU “shock” narrative and the international protest — HVG stressed the character extending to “essentially all imported goods”, Telex the scale of the sixty affected countries, and 24.hu foregrounded Kaja Kallas’s criticism (a “baseless” American move). The pro-government-conservative band (Magyar Nemzet) noticeably chose a different frame: the ironic-relativising headline “The tariffs are dead, long live the tariffs!” presented the move rather as a natural development in the transformation of world trade than as an unambiguous threat — it leans towards the normalisation of Trump’s policy. The two ends of the spectrum thus frame the same fact (global tariff package) in opposite ways: on one side a threat to the EU economy, on the other a self-evident milestone in the closing of the free-trade era.

6.2 Facts and data

  • The scale of the package: a new protective tariff extending to practically all imported goods, at least sixty affected countries, entry into force within hours (based on the press-monitor summary, 23–24 July 2026).
  • The structure of Hungarian exposure: an export-driven economy, strong integration into the German automotive chain — the exposure is dual (direct USA export + indirect German demand channel).
  • Competence: the common trade policy is an exclusive EU competence (Article 207 TFEU); the tariff response is negotiated by the European Commission, with the Council’s authorisation.
  • Additional data sources for the detailed working-out: KSH foreign-trade statistics, EU DG TRADE, WTO, OECD Economic Outlook.

6.3 Policy dimensions

  • Economy (programme points) — strategic industrial policy and export diversification, the resilience of the supply chain, SME financing;
  • Foreign policy (programme points) — the common EU trade stance, issue-based coalition-building within the Council, economic diplomacy towards the new markets.

6.4 Literature in detail

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

Chang’s central claim is that presenting free trade as an “eternal truth” is historically false: today’s rich countries themselves built up their industry behind protective tariffs, and the protectionist periods were by no means automatically accompanied by poor growth. As he writes:

“The truth is that, during the ‘bad old days’ of protectionism and state intervention in the 1960s and 1970s, the developing countries did not perform badly at all.”

For the current situation this gives a double-edged lesson. On the one hand, it counsels caution towards moralising free-trade rhetoric: the tariff is not in itself a taboo, but an instrument. On the other hand, precisely for this reason it also does not justify Hungarian closing-off — the protective tariff built industry when it was the conscious, long-term strategy of a catching-up economy, not the sudden punishment of a great power imposed on everyone. The rational path of the Hungarian response is therefore not the mirroring of the tariff, but the targeted strengthening of adaptability.

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

6.4.2 Joseph Stiglitz: Globalization and Its Discontents

Stiglitz argues not against trade, but against the sequence and the speed: sudden trade liberalisation carried out without a safety net (or its reverse, the sudden shock) is destructive, because the exposed sectors have no time to adapt.

“Jobs have systematically been destroyed […] before the countries’ industrial and agricultural sectors were able to grow strong and create new jobs.”

Although Stiglitz criticised the rapid opening forced on developing countries, the mechanism holds in reverse too: the sudden demand shock caused by Trump’s tariff hits the Hungarian supplier circle precisely when there is no ready transitional safety net. This is the direct theoretical underpinning of MIAK’s proposal 3.2 — the targeted, time-limited SME protection: the shock is not to be denied, but the time for adaptation is to be bought.

📖 Source: Joseph Stiglitz: Globalization and Its Discontents

6.4.3 Henry Kissinger: World Order

Kissinger places the phenomenon in the broadest, world-order frame. The institutional web of the Westphalian international order — of which open trade and a stable financial order are part — is not self-evident, but a fragile agreement:

“The contemporary, now global Westphalian system […] has striven to curtail the anarchical nature of the world with an extensive network of international legal and organizational structures designed to foster open trade and a stable international financial system.”

Kissinger’s warning that “the Westphalian principles are being challenged on all sides” fits the current situation precisely: a great power’s unilateral tariff package is not merely an economic but also an order-maintaining question — it erodes the rules-based frameworks. Seen from here, MIAK’s EU-unity proposal is not merely trade tactics, but a stand for the rules-based order: the proportionate, institutional (WTO-based) EU response protects precisely the order against arbitrariness.

📖 Source: Henry Kissinger: World Order

6.5 International comparison

In responses to tariff shocks several proven patterns exist. In the European Union’s earlier trade disputes (steel and aluminium tariffs, 2018), the combination of the proportionate, targeted counter-tariff and the parallel WTO procedure proved more effective than total escalation — this is the precedent of MIAK’s proposal 3.1. Germany’s 2023 China strategy (“reducing dependencies, strengthening resilience”) gives the model of sector-level risk assessment for the 3.2 exposure map. And South Korean and Taiwanese industrial development (the TSMC example also referenced in programme point G9) shows that lasting protection is not the tariff wall, but the structure of higher value added producing for several markets — this is the basis of the 3.3 diversification proposal.

Economy

  • G9 — Strategic industrial policy
  • G13 — Capital-markets-union implementation

Foreign policy

  • KP8 — Economic-diplomacy integration
  • KP17 — Issue-based coalition-building in the EU
  • KP4 — Principled-pragmatism doctrine

6.7 List of sources

Press sources (MIAK press monitor, 24 July 2026 — topic 5):

Knowledge-base references (literature):

  • 📖 Ha-Joon Chang: 23 Things They Don’t Tell You About Capitalism
  • 📖 Joseph Stiglitz: Globalization and Its Discontents
  • 📖 Henry Kissinger: World Order

Note: the local file path of the book does not appear in the visible text of the blog — only the author and the title. The file path is an internal matter of the generation process, not the reader’s.

MIAK internal materials:

  • MIAK policy area: Economy (programme points; programme point ID: G9, G13)
  • MIAK policy area: Foreign policy (programme points; programme point ID: KP8, KP17, KP4)
  • MIAK press monitor, 24 July 2026 — topic 5, score: 79/100

Additional public data sources:

  • KSH foreign-trade statistics; EU DG TRADE; WTO; OECD Economic Outlook

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