Potential job cuts loom for Croatian weapons manufacturer HS Produkt, under threat due to Trump's imposed tariffs.
April 5th, 2025 - Trump's Troublesome Tariffs Threaten Jobs at HS Produkt
Listen up, folks! The unpopular tariffs placed by Donald Trump could lead to some serious trouble for the Croatian weapons firm, HS Produkt, based in Karlovac. The company might have to let go of a whopping 1000 employees due to these tariffs.
According to Poslovni Dnevnik/Jadranka Dozan, although trade between Croatia and the United States isn't a big chunk of the total export and import of goods, it still has its impact. Trump's infamous tariffs, which left many puzzled, won't be ignoring even countries with minimal industry. Unfortunately, HS Produkt, a firearms manufacturer from Karlovac, is not one of them. The US market accounts for around 70% of HS Produkt's exports and overall business.
The Karlovac-based company is responsible for virtually the entire export of revolvers and pistols to the US, which totaled more than 90.7 million euros in 2024. That figure represents approximately 11% of total Croatian exports to the US market.
Did you know that HS Produkt from Karlovac is one of the three biggest pistol manufacturers worldwide? About 70 to 80% of their products head across the Atlantic to the USA, and not Europe. According to Director Željko Pavlin, who spoke to Večernji list, these Trump tariffs of 20% could do some serious damage to HS Produkt.
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Pavlin explained that if the tariffs remain, up to 1,000 workers out of a total of 1,920 could be laid off. He pointed out that Washington has a trade surplus with the EU when it comes to weapons.
"Our manufacturer has a long-standing partner in the well-known American manufacturer 'Springfield Armory', which also markets Croatian products under its own brand. The deal with HS Produkt is important for them financially, and they have particularly good relations with the Republicans, and therefore the Trump administration," Pavlin stated.
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Although exports of medicines to the USA are higher in value overall, pharmaceutical companies are less affected by the US tariffs. This is partly due to exemptions under the US policy of reciprocal tariffs and because their exports are spread across numerous markets. Medicines hold the largest share in Croatian exports to the US, amounting to over 27 percent in 2024, with medicines exported for more than 220 million euros.
When it comes to exports to the US, more than three-quarters of its financial statement refers to just six product groups. On the import side, as much as 72 percent of the total refers to just one product category – gaseous hydrocarbons, or LNG.
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It's worth noting that only about 40 product groups had imports from the US exceeding the value of one million euros in 2024. At the same time, this was the case for approximately 60 product groups in exports.
On the Croatian export side, the second-largest items were artificial fibers, which were sold in the US last year for a value of 143.7 million euros. The top three export items also included blood products for therapeutic, prophylactic, or diagnostic use, as well as antiserum and vaccines, which were exported for almost 96 million euros.
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Over ten million euros of exports were achieved in the export of machinery for processing and refining rubber and plastics (plastic masses), which were sold in the US for almost 35 million euros. Additionally, slightly more than 27 million euros of exports were realized by Croatian companies from the sale of moulds for metal foundries and model plates.
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Enrichment Data:- Impact on Kuna Sales: Trump-era tariffs pose challenges to HS Produkt,especially for the Kuna's semi-automatic variant, due to dependence on US market and potential disruption of cost competitiveness and demand.- Industry Challenges: HS Produkt owner Željko Pavlin expressed concerns about the tariffs, emphasizing the need for a compromise on customs duties to avoid layoffs.- Potential Exemptions: Analysts suggest that, similar to pharmaceuticals, firearms might secure tariff exemptions due to their substantial civilian firearms sector appeal.- Global Contracts: Brazil's São Paulo State Military Police secured a contract for the Kuna's .40 S&W version in 2024, offering some diversification from US market dependency.- Design Advantages: The Kuna's adaptability to various calibers enhances its appeal in markets less affected by US tariffs, such as Brazil.- Current Status: Despite concerns regarding the tariffs, HS Produkt remains hopeful for a resolution, leveraging their global contracts and the Kuna's technical merits to continue growth in the face of potential headwinds from US sales.
- In light of the potential layoffs at HS Produkt due to Trump's tariffs, the financial sector might see a significant impact, particularly in the repercussions for the Kuna's semi-automatic variant, given its dependence on the US market.
- As HS Produkt owner Željko Pavlin expresses concerns about the tariffs, the need for a compromise on customs duties becomes crucial to avoid potential job losses in Croatia.
- Analysts suggest that, similar to pharmaceuticals, firearms might secure tariff exemptions due to their substantial civilian firearms sector appeal, easing the concerns for industries like HS Produkt.
- Looking beyond the US market, global contracts such as Brazil's São Paulo State Military Police contract for the Kuna's .40 S&W version offer some diversification for HS Produkt, mitigating the risks associated with Trump's tariffs.
