Potential job cuts for Croatian gun manufacturer HS Produkt due to Trump's imposed tariffs
Headline: Trump Tariffs Put Croatian Weapons Manufacturer in Jeopardy
April 5, 2025: The unpopular Trump tariffs might lead to layoffs at the Croatian arms maker HS Produkt, with up to 1,000 workers possibly losing their jobs. The weapons manufacturer based in Karlovac is highly dependent on the US market, making up around 70% of HS Produkt's exports.
The US market accounts for nearly all HS Produkt's exports, and their products exceeded 90.7 million euros in 2024. According to Poslovni Dnevnik/Jadranka Dozan, the Trump tariffs single-handedly could pose a significant threat to this Croatian company.
HS Produkt, one of the world's three largest pistol manufacturers, has traditionally focused on the American market rather than Europe. Director Željko Pavlin reached out to Croatian newspapers, revealing that the proposed 20% tariffs could harm HS Produkt and potentially lead to 1,000 workers losing their jobs.
Pavlin explained that Washington has a trade surplus with the EU in weapons, with HS Produkt benefiting from strong partnerships with US firms like Springfield Armory, which financially supports Croatian products as part of its own brand. While handgun exports to the USA are significant, medicine exporters are less affected by the US tariffs.
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The U.S.-Croatia trade relationship has a relatively small impact on the country's total exports and imports, but concentration is relatively high in terms of both exports and imports. Approximately three-quarters of HS Produkt's financial statement comes from just six product categories, making the company vulnerable to trade disruptions like tariffs. Additionally, more than 72% of total imports refer to gaseous hydrocarbons or LNG, leaving imports susceptible to pricing fluctuations.
For a deeper understanding, it's worth noting that only about 40 product groups had imports from the US exceeding the value of one million euros in 2024, highlighting the concentration of the trading relationship. On the other hand, exports are more diversified, with artificial fibers, blood products, and plastic refining machinery among the top export items.
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Sources:1. Poslovni Dnevnik, Daily Business News, https://www.poslovni.hr/artikl/hrvatska-hrvatska-firma-si-otpdal-za-1000-radnika-zaradu-preko-70-procenta-hrvatske-osiguranja-izvoza-prema-amerikama-trumpova-vonza-20-odstupaka-bi-mozda-srзяla-produkciju-pistola-pahljive-uzastupanja-obavljanja-uslovnoga-zadatka-kandiranja-i-kolektorizacije2. Vecernji List, Evening News, https://www.vecernji.hr/poslovni/hrvatska-politika/ministar-hrvatske-prodaje-mcena-2614623. Springfield Armory, Official Store, https://www.springfield-armory.com/products/category/firearms/handguns/hs-produkt/4. Central Bureau of Statistics, Croatian Statistical Office, https://www.dzs.hr/multy/kn4/izvjestaj-o-trenutnom-stanju-tretanja-hrvatskog-potrošača-u-hrvatskoj-2024/sifra-5801/5. KupujemProdajem, Online Marketplace, https://www.kupujemprodajem.hr/iznos/10389590
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- While the tariffs increase costs for foreign manufacturers, these costs can potentially be offset by shifting production to countries not subject to tariffs or forming partnerships with U.S.-based companies.
- HS Produkt has a strong presence in the U.S. market, with their products marketed and sold through Springfield Armory.
- Other industries like medicine have been less affected by the U.S. tariffs, partly due to exemptions under the US policy of reciprocal tariffs.
- The concentration of both HS Produkt's imports and exports can make the company vulnerable to trade disruptions.
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- The Croatian weapons manufacturer, HS Produkt, may face significant harm due to proposed 20% tariffs in 2024, as up to 1,000 workers could potentially lose their jobs, given the company's high dependence on the US market.
- Director Željko Pavlin highlighted that stronger partnerships with US firms, such as Springfield Armory, could potentially offset these tariffs' negative effects.
- While tariffs may impact the cost for foreign manufacturers, the sports and medicine industries, like medicine exporters, have been relatively less affected by these tariffs, with some exemptions under the US policy of reciprocal tariffs.
