Trump’s Tariffs May Hurt Kazakhstan’s Economy, Expert Warns
On July 7, U.S. President Donald Trump informed Kazakh President Kassym-Jomart Tokayev that Washington will impose a 25% tariff on goods from Kazakhstan, effective August 1, 2025. Tokayev responded on July 10, affirming Kazakhstan’s commitment to "developing fair, predictable, and mutually beneficial trade relations" with the United States. He emphasized Kazakhstan’s readiness for “constructive dialogue aimed at finding a rational solution to trade issues,” expressing his hope that a compromise will be reached. While officials and analysts in Kazakhstan have downplayed the potential economic impact, citing limited trade volume and the exclusion of key exports such as oil and metals, economist Olzhas Baidildinov has challenged this optimism. In an interview with The Times of Central Asia, he outlines the potential long-term damage to Kazakhstan's economy and investment climate. TCA: What is the situation following the announcement of the increased tariffs? Baidildinov: The immediate damage is minimal, which is why many in the media and expert circles remain optimistic. Kazakhstan exports about $2 billion in goods to the U.S., of which $1.8 billion are raw materials, oil, metals, rare earth elements, silver, and precious metals, all previously exempt from duties. The remaining $200 million, mostly manufactured goods and agricultural products, will now be subject to the 25% tariff. Though small in macroeconomic terms, this is a significant blow to exporters and a deterrent for future investors. TCA: What are the broader implications of these tariffs for Kazakhstan? Baidildinov: The most serious consequence will be on investment. Domestic experts often lack a long-term view, rarely looking beyond a few months. But consider this: if you were an investor planning to produce in Kazakhstan and export to the U.S., would you proceed under these conditions? A 25% tariff today could become 50% or 100% tomorrow. This unpredictability will scare off potential investors. Trump’s message is clear: produce in the U.S. or face penalties. For Kazakhstan, there is little upside. The country’s oil and gas sector has made strides in localizing production of goods that could replace Western imports, but these products will now face higher entry barriers into the U.S. market. American companies may also become more cautious about engaging with Kazakh suppliers. More broadly, this signals that the U.S. does not regard Kazakhstan as a partner in high-tech manufacturing. Even American firms considering setting up production in Kazakhstan to benefit from low costs would now find the economics less favorable. Other countries, including EU members, may follow the U.S. example, reinforcing the perception of Kazakhstan as merely a source of raw materials. TCA: Do you expect further pressure from the U.S. or its allies? Baidildinov: This marks the beginning of a global tariff war. Other countries will likely adopt similar protectionist policies to defend their industries, especially in light of escalating U.S.-China trade tensions. European manufacturers, for example, may pressure their governments to implement similar tariffs. This trend could shape global trade for years to come, with Kazakhstan potentially caught in the crossfire. TCA: In your opinion, is the U.S. tariff increase...
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