This is a guest post by Peter Balogh, Hungarian serial entrepreneur, founder and CEO of the BET-listed startup investor firm STRT Holding. He began his career with internet startups in Hungary in 1996, later joining Nokia in Finland before founding PDAmill and then NNG, growing it from 4 to over 800 employees across 5 continents. After leaving NNG, he shifted focus to advising and investing in Hungarian tech startups.
Do you know what separates successful investors from the rest? While most people panic in times of uncertainty, the real pros see opportunity lurking behind every crisis. Strange as it may seem, Trump’s tariff war isn’t just causing chaos – it’s also opening doors for new ventures.
As Warren Buffett famously said, “Be fearful when others are greedy, and greedy when others are fearful.”
History shows us repeatedly that change is the engine of innovation. Think about it: whenever there’s a radical shift – be it technological breakthroughs, regulatory changes, or even trade wars – large, sluggish corporations tend to freeze up, while agile startups leap at the chance. Why? Because change rewards adaptability. Big companies behave like dinosaurs – massive and mighty, but vulnerable when the environment shifts. Small mammals (startups) survive and thrive because they’re quicker and smarter. Right now, thanks to President Trump, we’re experiencing another meteor shower.
Crisis or opportunity?
Life would undoubtedly be simpler for startups if it weren’t for those colossal US tech giants dominating everything. They’ve got the money, the know-how, extensive networks, powerful brands – you name it. In a static world, small European startups wouldn’t stand a chance.
But our world is anything but static – it’s rapidly changing.
Trump’s 10% general tariff in April 2025, along with additional targeted tariffs, are shaking global markets. Stock exchanges worldwide are in panic mode, investor confidence is plummeting, and business leaders are bracing for impact. Yet, this upheaval is precisely what creates opportunities for nimble startups.
As Harvard professor Willy Shih notes, “We live in an interdependent world, and if we are going to break those interdependencies, it’s not going to happen overnight.” Translation: uncertainty is here to stay for a while, and startups that embrace it will thrive.
Three reasons to bet on European startups now
1. US tech losing ground
America is the world leader in exporting digital services, boasting a trade surplus of $178 billion (as of 2023). However, the ongoing tariff war could significantly impact this dominance.
Tariffs mean higher prices and reduced competitiveness for US tech products. The unpredictability makes them even less appealing globally. Meanwhile, European startups now have a golden chance to step in, offering localized, affordable, and stable alternatives. The European market itself is becoming increasingly important – our home turf advantage. Plus, markets from Canada to China will seek reliable partners unaffected by US tariffs.
This situation is also likely to accelerate EU integration and create new international alliances, including deeper collaboration with economies like China.
2. The end of the Brain Drain
Remember those old Russian “Rocket” vacuum cleaners that could blow as well as suck air, depending on which end you attached the hose? That’s essentially what’s happening with talent in the US right now.
Currently, 23.1% of STEM workers in the US are foreign-born, making America a global innovation powerhouse. But Trump’s policies have inadvertently reversed the talent pipeline. Visa revocations, surprise deportations, sudden grant cancellations – these horror stories have 75% of top researchers and scientists (according to a recent survey by Nature) contemplating leaving the US.
Imagine the boost if these brilliant minds flocked to Europe! We’re talking about massive knowledge transfers, technological spillovers, and new startup opportunities.
Already, twelve European countries have urged EU Innovation Commissioner Ekaterina Zaharieva to act swiftly to capture this potential. The European Research Council plans to double grants, offering up to EUR 2 million to researchers relocating to the EU. Talent goes where it’s valued, and Europe is ready to embrace it.
3. EU funding and policy response
Europe isn’t sitting idle. Initiatives like Horizon Europe, Digital Europe, and InvestEU are already funneling billions into tech innovation across the continent.
Of particular interest to startups in Eastern Europe: the EU’s commitment to reducing regional disparities promises additional funding streams for emerging tech hubs.
Just as the war in Ukraine energized European energy startups, Trump’s tariff war could trigger similar mobilization, pushing the EU to strive for greater technological independence. Europe can’t afford dependency on US innovation any more than it can afford energy or security vulnerabilities. Expect significant national and EU-level investments into regional innovation soon.
Strategies for regional startups
If you’re building a startup – or already have one – here are your keys to success:
- Prioritize the European Market: The tariff war makes Europe your home-field advantage. Meanwhile, global markets outside the US are actively seeking reliable, innovative partners unaffected by the tariff chaos.
- Welcome Returning Talent: Leverage the influx of skilled professionals and scientists moving from the US back to Europe.
- Target Niche Markets: Identify where US tech products are becoming costly or scarce and step in with your innovative alternatives.
As you can probably tell, I’m no fan of protectionism — it feels like an outdated relic. To me, globalisation means every region should focus on what it does best, instead of wasting resources covering weaknesses. Yet, this tariff turmoil underscores one crucial truth: solving new problems quickly and creatively is how great companies are born.
Weirdly enough, America’s blunder might just be Europe’s golden opportunity to reclaim its innovation crown. Europe, including countries like Hungary, is home to groundbreaking startups in fields from cancer treatment to digital education, e-commerce, and fintech.
In short, investing in great teams and innovative companies pays off – especially when others aren’t brave enough to do it.
So, here’s to smart startups and investors ready to seize the opportunity hidden in the chaos.
