The decision by the President of the United States to impose a 25% tariff on imports from Canada and Mexico will stir up international trade, but for Ukraine—both the government and businesses—it's crucial to continue exporting under the new conditions, regardless of any statements made, believes Taras Kachka, Deputy Minister of Economy and Trade Representative of Ukraine.
"Closing the border, even with a free trade agreement in place, is a situation we have been familiar with since 2023 due to the bans from our neighbors. However, trade continues and barriers are being lifted. In both our case and with the U.S., Canada, and Mexico, the conflict only highlights the importance of free trade agreements," - wrote him on Facebook.
Kachka reminded that during Trump's first administration, the NAFTA agreement was updated to USCMA/CUSMA/MUSCA, and also noted that currently, a significant liberal leader in the world is Argentina's President Javier Milei, who opposes tariffs in general and is abolishing them in Argentina, indicating that pro-tariff thinking is not monolithic worldwide.
Regarding the likelihood of American tariffs on Ukrainian products, the trade representative pointed out that Ukrainian exports to the U.S. increased by 67% in 2024, totaling $869 million, which accounted for 2.08% of total exports, while imports from the U.S. reached $3.4 billion, or 4.95% of total imports into Ukraine.
Kachka specified that this surge in exports to the U.S. is primarily due to metals, which began to be transported by sea, while the American imports to Ukraine mainly consist of security-related goods and used vehicles.
"Logically, the U.S. President should consider removing tariffs for Ukraine to balance trade. However, this is unlikely to be the most probable scenario. Nevertheless, there are chances for a pragmatic agreement with the U.S. regarding steel tariffs," - concluded the trade representative.
In his view, a major challenge will be a wave of measures aimed at correlating trade flows. Kachka recalled how the EU introduced protective measures on steel in response to Trump's tariffs during his first term, which also affected Ukraine.
"Therefore, the main focus now is to maintain and develop relationships and to reduce tariffs with closer trading partners," - Kachka believes.
He noted that Ukraine's trade is predominantly Euro-Mediterranean—76.8% of goods were exported to this region in 2024, and the countries in this region are united by the Pan-Euro-Mediterranean rules of origin, which allow for the establishment of duty-free supply chains based on EUR.1 certificates, a benefit that, for example, is well recognized by the Ukrainian textile industry.
According to the trade representative, in this sector, Ukraine will continue to integrate into the EU's internal market, where there are no tariffs on more than 10,000 goods, with only 7 items currently partially restricted de jure, and another 4 agricultural products not exported to neighboring EU member states as sensitive goods. "Our task this year is to at least maintain the existing trade parameters with the EU. However, this is only important for sensitive agricultural goods," - wrote the trade representative.
He clarified that there are no customs barriers for industry; Ukraine has transitioned to the new Pan-Euro-Mediterranean rules and will add transitional rules in a few weeks, and in just a few months, "the 20-year saga of the industrial visa-free regime under the ACAA will enter its final stage—official negotiations."
"Therefore, this year, trade in industrial products will effectively occur under the EU's freedom of movement of goods," - Kachka believes.
Among other tasks for this year, he mentioned the ratification of the free trade agreement with Turkey and the modernization of the free trade agreement with EFTA.
The trade representative of Ukraine also expressed a desire to establish free trade agreements with other Pan-Euro-Mediterranean countries: Egypt (exports in 2024 - $1.6 billion), Lebanon ($412 million), Tunisia ($330 million), Algeria ($314 million), Morocco ($160 million), Serbia ($130 million), Jordan ($98 million), Albania ($31 million), Bosnia and Herzegovina ($21 million), Palestine ($20,000), Syria ($8 million), and the Faroe Islands ($14,200). "Here, the volume of trade is not as important as the ability to build production chains," - he explained.
Another vector Kachka identified is the development of relationships with countries that prioritize trade—Canada, Britain, and the UAE—stating that an agreement with the UAE will be signed very soon, and there are intentions to make a few more improvements to the agreement with Britain this year.
The trade representative of Ukraine also emphasized the importance of expanding the network of digital trade agreements and agreements on mutual protection of investments. "Currently, these agreements may not seem significant, but when trade antagonisms extend into the digital realm, such digital trade agreements will be a tool for protecting access to external markets," - he clarified.
Reflecting on the WTO and conflicts in global trade, Kachka urged to recognize all new trends in trade policy and to formulate interests in a relevant language, "so as not to lag behind, as was the case in our 90s."
"At present, we need to focus on bilateral relations with key partners and on active tools to protect national producers—trade protection, administrative measures, and if necessary, raising tariffs and banning imports where needed, not just where possible. However, all this should develop only within the context of Ukraine's industrial policy 'Made in Ukraine'," - concluded the trade representative.
He predicted that future trade agreements would not be agreements on free trade but on economic security, where security guarantees would go hand in hand with market access and assurances for private companies. "It is quite possible that this is the logic behind our future agreement with the U.S.," - added Kachka.