HS Produkt: A Thousand People May Lose Their Jobs, Cooperatives Without Income

The new tariffs introduced by U.S. President Donald Trump have raised serious concerns among Croatian exporters, particularly those heavily reliant on the U.S. market. These measures, ranging from a universal 10 percent on all imported products to an additional 50 percent for certain countries and sectors, could potentially jeopardize jobs in Croatia.

Leading Croatian weapon manufacturer HS Produkt is one of the companies that could be hardest hit. According to CEO Željko Pavlin, as much as 70 percent of the company’s total production is exported to the U.S. market.

– You cannot substitute a market overnight. We are increasing shares elsewhere, but America still accounts for 70 percent of our total exports and production. Pistols are the bulk of our production; there is no other market that can compensate for America. Tariffs mean price increases, and thus we cease to be competitive as we have been so far. We will try to talk to the government; we see that other countries are pushing their interests, and something will certainly need to be done here. We expect the government to fight for Croatian companies. For HS, this could mean that a thousand people lose their jobs and a hundred cooperatives lose income – Pavlin told Lider.

Pavlin emphasized that relocating production to the U.S. is not a quick or simple option, and the final price of products would still increase due to labor costs and raw materials, as the U.S. has also imposed tariffs on numerous raw materials.

Unlike HS Produkt, the pharmaceutical industry has not yet been directly affected by the new tariffs. Pliva, a member of the Israeli Teva group, states that pharmaceutical products are exempt from reciprocal tariffs.

– We are closely monitoring information and assessing how the new measures could impact active pharmaceutical ingredients and other substances – Pliva representatives stated, reminding that tariffs on a significant number of pharmaceutical products were abolished back in 1994 under the World Trade Organization’s Agreement on Trade in Pharmaceutical Products.

Podravka is also monitoring the situation’s development.

– During 2024, Podravka recorded significant revenue growth in the U.S. market, and our intention is to continue to market our products in that market, as well as provide distribution services for other companies. It is important to emphasize that Podravka distributes its products in over 60 countries worldwide. Such a wide distribution represents the best guarantee of stability and growth in overall sales and provides support in overcoming challenges in individual markets.

Although Podravka has not directly commented on the impact of the new tariffs on its business, it is clear that market diversification will play a key role in mitigating potential consequences.