Coface: New US Tariff Regime Has Limited Direct Impact on Bulgaria, but EU Demand Risk Looms

Washington's New Tariff Regime and Where Bulgaria Stands

The United States has turned its temporary tariff measures into a more durable policy. Washington replaced the expired duties with a new regime under Section 301 of US trade law, applying rates of 10% to 12.5% to goods from 60 countries — the group that accounts for about 99% of US goods imports.

According to an analysis by Coface, the switch should not raise average US tariff levels significantly, because the new rates do not automatically stack on top of existing duties. For Bulgaria, the direct effect is expected to be limited.

The bigger risk is indirect. Bulgaria's largest trading partner is the European Union — exports to the bloc reached €9.85 billion in the first four months of 2026, up 8.5% year on year. If tariff disruption dampens demand in Western Europe, Coface argues, Bulgarian producers integrated into European manufacturing chains — especially in processing industries and machinery — would feel it through weaker orders.

Washington is already preparing the next stage. A Section 301 investigation is running against 16 economies, including the EU, China, Japan, South Korea, Taiwan, India, Vietnam and Mexico, to determine whether their production capacity generates exports at prices that distort competition. No timing or tariff size has been announced. Separately, the US has imposed 50% tariffs on $20 billion of Canadian imports, effective August 19.

Why Bulgaria's Real Exposure Runs Through Western Europe

A More Durable Legal Base, Not a Higher Wall

Coface's central reading is that the change is more than a technical swap of customs regimes. Moving the duties onto Section 301 gives the US administration a more stable legal foundation for tariffs, which signals that Washington intends them to be a lasting instrument of trade policy rather than a temporary negotiating device. For companies planning production and trade flows, that direction of travel matters more than the current rates.

Where the Risk Actually Reaches Bulgaria

Bulgaria's direct exposure to US tariffs is modest because its trade is overwhelmingly oriented toward the EU. The data illustrate the balance: exports to EU member states totalled €9.85 billion between January and April 2026, a year-on-year rise of 8.5%. Coface identifies the indirect route as the main channel of concern — if slower demand or tariff uncertainty weighs on Western European industry, Bulgarian producers embedded in those supply chains, particularly in processing and machinery, would absorb the slowdown through reduced orders rather than through duties on their own exports.

The Next Wave: An Investigation That Names the EU

The pending Section 301 investigation is the development that could change Bulgaria's position. It covers 16 economies, including the European Union, and the procedure allows Washington to direct future measures at specific countries or sectors. If the EU becomes a target, Bulgarian exporters could be affected twice — directly if their goods fall within the scope of new duties, and indirectly as the bloc's manufacturing base adjusts. For now, neither the timeline nor the scale of any new tariffs is known.

Canada as a Signal of Escalation

The new 50% tariff on $20 billion of Canadian imports, due to take effect on August 19, is a separate case but a useful one. Coface expects the direct economic impact on Canada to be contained — yet the measure underlines that US tariffs now operate as a tool of economic and diplomatic pressure, not just trade policy. European exporters may need to treat such escalation as a recurring possibility.

What Bulgarian Exporters Should Track in the Next Tariff Wave

This story matters most to Bulgarian exporters and manufacturers integrated into European supply chains, particularly in processing industries and machinery. The direct tariff wall has hardly moved, but the next wave of US measures could change the picture.

• Track the Section 301 investigation covering the EU and 15 other economies. It determines whether Washington will impose new, sector-specific tariffs on European goods — the single biggest variable for exporters with US-facing customers.
• Stress-test order books against a Western European slowdown. Bulgaria's EU exports reached €9.85 billion in January–April 2026, so weakness in eurozone industrial demand would outweigh any direct US tariff effect; follow monthly eurozone industrial production data as a leading indicator.
• Do not treat the current 10%–12.5% rates as a ceiling. The Section 301 process allows Washington to target specific countries or industries, so product lines hit in a later round could face higher, narrower duties.
• For companies that do sell directly to the US, verify the tariff classification of each product line. Since the new rates do not automatically add to existing duties, goods already covered by earlier tariffs may see little change — while others could be newly exposed.