Prime Minister Viktor Orban has long maintained close personal ties with U.S. President Donald Trump. Orban also shares an ideological affinity with the MAGA movement. Yet on one point, the two differ: China policy.
Since taking office again, Trump has sought to pressure other countries to disengage from Beijing. U.S. Chargé d’Affaires Robert Palladino, in his address to the Central European Summit on April 15, emphasized the strategic challenges posed by China to the United States and its allies, framing the countering of Beijing’s “malign” practices as a top priority. Nevertheless, Orbán has continued to deepen Hungary’s partnership with China under the banner of the Eastern Opening policy and a renewed emphasis on economic neutrality. This raises the question: how is Hungary navigating the tensions between its ideological ally and its economic partner, which are increasingly at odds?
In July 2025, Foreign Minister Peter Szijjarto told executives of Chinese companies that “Hungary proudly serves as the primary European destination for Chinese capital,” while “rejecting in the strongest possible terms the idea of dividing the world into blocs again.” When asked whether Budapest would decouple from China if urged to do so by Trump, Deputy Foreign Minister Levente Magyar replied: “Definitely not. That’s a red line for us.”
Observers have noted continuity in Hungarian foreign policy toward China, yet few have explained why Budapest has not altered its course in the face of a more coercive Trump administration. Four main factors that help explain such foreign policy continuity: economic interests, personalized foreign policy, a polyalignment strategy, and the lack of viable alternatives from the United States.
Hungarian Economic Interests in China
For years, Hungary has maintained a robust economic relationship with China. China was Hungary’s largest source of foreign direct investment (FDI) in 2020, 2023, and 2024. Hungary alone accounted for 31 percent and 44 percent of Chinese FDI in Europe in 2023 and 2024, respectively, driven largely by a surge in electric vehicle investments.
Rejecting Brussels’ predominant geopolitical concerns over Chinese capital, the Hungarian Investment Promotion Agency (HIPA) actively courts FDI from Beijing, asserting that “there is only one thing wrong with Chinese capital: there is not enough of it.” HIPA has also celebrated several successful Chinese investment projects, including Huawei’s R&D center in Budapest and Wasion’s global R&D center and production site in Godollo.
In trade, China is Hungary’s largest non-European partner, with the bilateral trade volume in 2024 rising by 11.6 percent from the previous year. Like the rest of the EU, Hungary depends on imports of Chinese raw materials, automotive components, metal products, textiles, and electronics.
Maintaining close economic interdependence with China has thus become a core Hungarian state preference, focusing on stabilizing bilateral relations despite mounting calls for de-risking. In this context, Budapest’s search for alternative external financing aligns with Beijing’s search for market opportunities within the EU. Hungarian leaders have consistently framed economic interests as decisive in sustaining a business-as-usual approach.
As Szijjarto put it: “We agree with the economic players here. If something works well in the economy, politicians should not spoil it. And Hungary is the best example of how cooperation between Western and Chinese economies can be of great benefit to both the West and China.”
Personalized Foreign Policy
Beyond economic factors, Hungary’s foreign policy orientation toward China – shaped by Orban’s Eastern Opening policy – bears the prime minister’s personal imprint. This reflects a broader trend in democratic backsliding, in which the Hungarian diplomatic establishment has been captured by populist leadership.
Orban’s personal investment in the relationship is evident not only in his frequent visits to Beijing but also in his consistent refusal to criticize China on various issues in European Council discussions. Given the direct link to Orban himself, a drastic shift away from this China policy posture – even under U.S. pressure – could undermine the legitimacy of the incumbent government.
The issue is particularly fraught because domestic criticism of Chinese investments is already mounting, as exemplified by the 2021 protests against the planned Fudan University campus in Budapest.
Strategic Polyalignment
Some scholars describe the Eastern Opening policy as a polyalignment strategy – defined in political economy terms as the simultaneous alignment or engagement with opposing sides in geoeconomic and geopolitical competition. Strategically, the partnership with China is viewed as advancing both Hungary’s economic objectives (by integrating it into reorganized global value chains) and its political aims (by enhancing the country’s international bargaining power).
In practice, Hungary aligns with Beijing to support its reindustrialization agenda, positioning itself as a key manufacturing hub linking German automakers, East Asian battery producers (including Chinese firms), and Russian energy suppliers. Domestically, this is framed as part of “Hungary’s new strategy of connectivity,” designed to mitigate risks and exploit opportunities amid global tensions by embedding the country within multiple global networks.
Lack of Alternatives From the United States
Notably, the U.S. attempt to drive a wedge between Hungary and China predates Trump 2.0. Washington and Brussels have long been wary of Budapest’s ties to Beijing but have failed to prevent Orban from drawing closer to China. In fact, during Trump’s first term, Hungary established a Comprehensive Strategic Partnership with China, signed a Belt and Road cooperation plan, and dismissed U.S. warnings over Huawei by supporting its role in Hungary’s 5G networks.
In his second term, Trump has continued – and in some cases even intensified – the use of coercive diplomacy to compel other states into compliance, as seen in disputes with Panama over its ties to China. Orban’s ideological affinity with U.S. conservatives and the MAGA movement may soften the White House’s approach toward Budapest, potentially reducing the need for coercive tactics. Still, given the power asymmetry, how such dissuasion without overt confrontation will unfold remains uncertain.
On a practical level, Trump’s isolationist foreign policy and protectionist trade agenda limit the U.S. ability to offer economic alternatives that might compete with Chinese opportunities. Trump’s ongoing trade dispute with Brussels could harm Hungary’s export-oriented economy, which relies heavily on automobiles, pharmaceuticals, and wine – three of the EU’s largest exports to the United States. The automotive industry alone accounts for 5 percent of Hungary’s GDP, employs more than 100,000 people, and represents 21 percent of its total exports, with the U.S. as a key market. Hungary also exports more pharmaceuticals to the U.S. than to any other single market; in 2024, pharmaceutical exports totaled $4.38 billion.
After European Commission President Ursula von der Leyen struck a trade deal with Trump on July 27 – including a 15 percent flat tariff on most EU exports, such as automobiles, and a commitment to purchase $750 billion in U.S. energy over three years – Orban accused Brussels of weakness at the negotiating table and voiced strong criticism of the deal. Current bilateral talks between Budapest and Washington on issues such as renewing a tax treaty and attracting U.S. investment appear aimed less at creating new growth opportunities and more at mitigating risks from U.S. tariffs.
The unpredictability of the Trump administration may encourage Budapest – like many other countries – to diversify its international partnerships. Given Hungary’s already close ties with Beijing, distancing appears unlikely, at least in the short term.
In sum, Hungary under Orban has sought to maintain close, business-as-usual ties with China despite U.S. pressure. This stance is driven by strong economic interests, a strategic polyalignment approach, and personalized diplomacy. The Eastern Opening policy continues to align with Orban’s priorities and Hungary’s global positioning, while U.S. protectionism, isolationism, and Trump’s policy unpredictability limit viable alternatives. Together, these factors help explain why Budapest is unlikely to pivot away from Beijing.