The thriving car industry in Europe, often referred to as 'Europe's Detroit,' now faces a threat from Trump tariffs.

• Slovakia, often referred to as the "Detroit of Europe" because of its flourishing automotive industry, has the highest car production rate per capita globally.
• The promise of President-elect Donald Trump to impose a 10% or 20% tariff on imported goods jeopardizes Germany's standing as a world-renowned car manufacturer.
• Over 250,000 people in the country of 5.5 million people depend on U.S. trade, with autos being a significant portion of its U.S. exports.

The small European country seems to be particularly vulnerable to President-elect Trump's "America First" economic plan.

Slovakia, often referred to as the "Detroit of Europe" because of its flourishing automotive industry, has the highest car production rate per capita globally.

The possibility of Trump imposing a 10% or 20% tariff on goods entering the U.S. could harm Central Europe's standing as a leading car manufacturer globally.

On Monday, the new U.S. president announced plans to impose new tariffs on China, Canada, and Mexico. Specifically, he pledged to add a 10% tariff on all Chinese imports and a 25% tariff on goods originating from Canada and Mexico.

European Union policymakers will view the absence of Europe in Trump's first tariff announcement as positive news, but they are concerned that it may only be a matter of time before he targets the auto sector in the 27-nation bloc.

A significant issue for Slovakia is its heavy dependence on U.S. trade, with autos being a substantial portion of its exports to the U.S. and the sector supporting over 250,000 people.

According to Vladimir Vaňo, chief economist at Globsec in Bratislava, Slovakia has become the European version of Detroit.

In 1990, Slovakia produced zero cars after the fall of the Iron Curtain. However, it excelled in special manufacturing, which refers to arms production, armored vehicles, and tanks.

Slovakia's potential for engineering and manufacturing was first recognized by Germany, starting with the assembly of gearing boxes before rapidly scaling up to the manufacture of full vehicles, according to Vaňo.

In addition to Volkswagen's factory in Bratislava, Peugeot, Hyundai Motor's Kia, and Jaguar Land Rover have all set up manufacturing facilities in the country.

In 2022, Volvo, a Swedish car company, announced plans to become the fifth car company to operate in the country. The company will open a climate-neutral factory in eastern Slovakia in 2026, with a 1.2-billion-euro ($1.26 billion) investment. The plant will only produce electric cars.

Vaňo of Globsec stated that while it is concerning for Slovakia to consider the possibility of Trump tariffs, it is a form of a wait-and-see, lame-duck approach.

Although there seems to be "little" Slovakia can accomplish in the near future, its automakers have demonstrated resilience in overcoming obstacles in the past.

No immediate comment from Slovakia's government spokesperson when contacted by CNBC.

Challenges ahead

Trump tariffs are likely to make Germany's struggling auto industry even more vulnerable, alongside Slovakia.

Germany, with a value of 23 billion euros, is Europe's largest exporter of passenger cars to the U.S., accounting for 15% of its total exports to the region, according to data from Eurostat and ING Research.

The possibility of U.S. tariffs on European autos could exacerbate the already unfavorable conditions in Germany, according to Rico Luman, senior sector economist for transport and logistics at Dutch bank ING.

"The automotive industry is linked to the steel and chemical industries, making it the full supply chain that's involved, according to Luman's statement to CNBC via video call."

In 2023, Slovakia was Europe's joint-third-largest exporter of passenger cars to the U.S., alongside Sweden, with 4 billion euros worth of exports to the U.S.

To the U.S., Slovakia's passenger car exports account for nearly three-quarters (74%) of its overall export package, leaving the country vulnerable to the threat of Trump tariffs.

According to Arushi Kotecha, automotive analyst at the Economist Intelligence Unit, Slovakia has excelled in auto production but now faces challenges.

One of those issues stems from China.

European lawmakers are attempting to maintain their position by preventing Chinese automakers, including , from gaining excessive market penetration in Europe, in terms of both sales and investment.

The Chinese part of the trade war is settled, but there is still uncertainty due to the Trump election.

She pointed out that Trump's threats are not always fulfilled, and the extent to which he follows through varies.

The European Commission's spokesperson directed CNBC to EU President Ursula von der Leyen's congratulatory message to Trump on his election win when queried about the possibility of U.S. tariffs.

In a Nov. 6 statement, von der Leyen stated that the European Union and the United States are more than just allies.

We should collaborate on a transatlantic partnership that benefits our citizens. This partnership will create millions of jobs and facilitate billions in trade and investment on both sides of the Atlantic, she emphasized.