Cadez: Best solution being sought for easing US tariffs

Serbia is making efforts in negotiations with the US to ease the introduction of new tariffs that the US administration is announcing as of August 1, especially on the most important export products, including tires. I am optimistic about finding the best solution, given the good political and economic relations with the United States, said Marko Cadez, President of the Serbian Chamber of Commerce, in an interview with Bloomberg Adria TV’s Zoom In show, as announced by the Serbian Chamber of Commerce.

Commenting on the estimates of GDP growth in Serbia, from 2.8% as forecast by the MAT, to the optimistic 4.2% predicted by the Serbian Government, Cadez states that GDP growth is also conditioned by our export markets, which are recording a slowdown, primarily the European Union members.

– In Germany, which has stagnated economically and is recording a decline in investments, a slight recovery is being registered, and our companies exported 20.7% more in the first five months of this year compared to the same period last year. In the trade with Germany, we are recording a surplus for the first time in the past two decades, which is the result of quality cooperation and an increase in orders for Serbian companies – stated Cadez.

The data show that Serbia’s industrial production and exports are growing - in the first five months, exports were 10.2% higher compared to the same period last year - which indicates that the Serbian economy is functioning stably in complex conditions, assessed the President of the Serbian Chamber of Commerce, warning that caution should be maintained, because of the numerous challenges, especially in terms of global trade relations.

According to him, investments from high-tech companies are increasingly coming to Serbia. As an example, he cited the company Toyo Tires, which is moving its research and development from Germany to Serbia, thanks to the quality of domestic engineers and the innovative community.

On the other hand, the departure of certain manufacturers, such as the Leoni company, which is closing one of its factories, testifies to a natural, developmental process - when the economy grows and becomes more knowledge-based, production with low added value moves to countries like Tunisia, Morocco or Egypt, where labor is cheaper, Cadez said. He added that it is important for this process to happen gradually and for solutions to be found with the state for tax and other reliefs in order to enable labor-intensive industries to undergo a transition period.

Cadez referred to the results of the Center for Economic Initiatives and Quick Solutions, which the Serbian Chamber of Commerce established to more efficiently resolve administrative obstacles and speed up processes of importance to the economy.

– Bottlenecks have been identified in the construction industry, such as the slow issuance of permits - especially for solar power plants within industrial facilities. Today, after only a few months of operation of the Center, the number of issued permits has increased from a single digit to over 40 – Cadez said.

He added that systematic work is being done to resolve specific problems and harmonize bylaws, which often conflict with each other and lead to different interpretations. The goal, he said, is to have a clear set of recommendations by autumn that will go from the republican level to local governments - in order to achieve a unified interpretation of regulations.

Cadez stressed that the situation was stabilizing, but that six or seven months of political instability could not pass without affecting the economy.

– None of the major investors said they were giving up, but many potential investors decided to wait. It is important to be responsible because the economy is what provides us all with a standard of living – he emphasized.

As key problems facing the economy, Cadez singled out the rise in electricity prices, the shortage of labor and the abuse of sick leaves.

– The rise in electricity prices is particularly affecting energy-intensive industries. We are discussing with the state how, through excise duty corrections or a collection model, to enable a more flexible system that would prevent factory closures – he said.

Privredna komora Srbije

Leoni Wiring System Southeast d.o.o. Prokuplje

Toyo Tire Serbia d.o.o. Inđija

Serbian Chamber of Commerce

Toyo Tires

Leoni

Marko Čadež

US tariffs