The historical background and political changes in Central and Eastern Europe have had a significant impact on the development of Hungarian-American foreign relations over the past hundred years. Over the last thirty years, Hungary has regarded the US as one of its most important military, political and economic allies, and this has been reflected in Hungarian foreign policy. However, tensions and geopolitical uncertainty caused by the war, as well as the less than friendly diplomatic moves of the previous Biden administration, have also affected relations between the two countries. Today, there are more than 1,300 American subsidiaries operating in Hungary, providing more than 96,000 jobs. Hungarian exports to the US have been growing year on year, reaching a value of nearly USD 7 billion in 2024. The following summary reviews the diplomatic and economic relations between the two countries, touching on how the second Trump administration may affect bilateral relations between Hungary and the US.
The beginnings of diplomatic relations
The first American diplomatic representation in the Kingdom of Hungary was established in 1869, when a consular agent was appointed to Pest. Subsequently, a consul was appointed in 1874. Until its closure in 1917, the post functioned as a consulate general from 1904. Hungary opened its first diplomatic missions in 1922, which were the consulate general in New York and three additional consulates in Pittsburgh, Chicago and Cleveland.
After the United States entered the war against Germany, the Austro-Hungarian Monarchy severed diplomatic relations with the United States on 8 April 1917. Subsequently, on 7 December, the United States also entered the war against the Austro-Hungarian Monarchy. Following World War I and the adoption of President Woodrow Wilson’s Fourteen Points, the Allied Army Mission supervised the observance of the armistice on the Hungarian side. The American Commission for Peace Negotiations and the American Food Administration sent several missions to Hungary in 1919, further deepening bilateral relations.
On 4 December 1919, Ulysses Grant-Smith was appointed the United States’ commissioner to Hungary with the aim of reporting on political developments and promoting trade. During this period, the United States did not ratify the Treaty of Saint-Germain, which recognised Hungary’s independence, nor the Treaty of Trianon, which defined Hungary’s post-war borders. Therefore, the restoration of relations had to wait until the end of the state of war, which took place on the basis of a joint resolution of Congress on 2 July 1921. On 12 August, the Hungarian National Assembly accepted the terms of the joint resolution and authorised the Hungarian government to negotiate a treaty with the United States.
The United States considered the Versailles peace system following the First World War, which included the annexation of a significant part of the former Hungarian territories as well as control over domestic political and military units, to be unjust, therefore Congress did not ratify it. In August 1921, Budapest and Washington adopted a separate peace treaty, which did not differ greatly from the provisions of the Treaty of Trianon. The only difference between the two documents was that the separate peace treaty omitted the sections relating to the League of Nations.
Following the signing of the post-war treaty on 29 August 1921, which re-established friendly relations between Hungary and the United States, the American Embassy was established in Budapest under the leadership of temporary chargé d’affaires Ulysses Grant-Smith. On 11 January 1922, Count László Széchenyi took up his post as Hungary’s first minister to the United States, a position he held until 31 March 1933. Between the two world wars, foreign relations between the United States and Hungary developed favourably, and there was no dispute between the leaders of the two countries regarding the territories returned under the Vienna Awards either. After Germany declared war on the United States, Hungary broke off diplomatic relations with Washington on 11 December 1941, followed by a declaration of war on 13 December. However, President Franklin D. Roosevelt believed that Hungary, Bulgaria and Romania had declared war against the will of their peoples, and therefore Congress did not approve the declaration of war until 5 June 1942. Herbert Claiborne Pell, the United States minister to Hungary, left Budapest on 16 June.
After World War II
The United States attributed Hungary’s entry into World War II, and thus the confrontation between the two former allies, to the influence of German forces, which at that time were decisive in both Hungarian domestic and foreign policy. From April 1944 onwards, American and Allied forces bombed Hungary on several occasions, causing severe destruction, but mainly targeting military and industrial units in Csepel. All this led to a low point in relations between the two countries.
With the onset of the Cold War after the war, relations between the US and Hungary also stagnated, with the Truman Doctrine, proclaimed in 1948, seeking to weaken communist regimes through economic embargoes and psychological warfare. The failure of the 1956 revolution highlighted that the previous US foreign policy strategy was unsustainable, so it had to abandon its goal of liberating individual countries. Although they assured the young Hungarian revolutionaries of their verbal support, no actual physical support was forthcoming. For the US, maintaining the balance of the bipolar world order proved to be more important at that time than actively helping a country seeking to free itself from dictatorship. Instead, hereafter they focused on liberalisation and democratisation. In 1966, the Hungarian diplomatic mission was declared an embassy, and a year later, in September 1967, Martin J. Hillebrand became the first American ambassador to Hungary. János Nagy began his work on 7 October 1967 as Hungary’s first ambassador accredited to the United States, where he served until 9 June 1968.
Meanwhile, the economic situation in Hungary continued to deteriorate, making it inevitable that foreign, typically Western, loans and aid would be needed to maintain the socialist system. In the last decade before the regime change, relations between the two countries became harmonised once again, and Hungary became a member of the International Monetary Fund (IMF) and the World Bank, thus gaining access to loans that helped to alleviate its economic difficulties.
During his meeting with Hungarian officials in Budapest in 1989, President George Herbert Walker Bush announced the opening of the Hungarian-American Enterprise Fund to promote broader cultural and educational exchange opportunities. He also established a peacekeeping programme to teach English in Hungary and organised the opening of American Corners in Pécs, Veszprém and Debrecen. These partnerships between the U.S. Embassy’s Public Affairs Section and host institutions continue to provide the general public with access to current and reliable information about the United States.
In honour of one of the darkest periods in Hungarian history, President Árpád Göncz attended the opening of the Holocaust Memorial Museum in Washington in 1993.
Between 1989 and 1993, the United States provided more than $136 million in support for economic restructuring and private sector development in Hungary through the SEED programme, which supported democracy in Eastern Europe. As the culmination of its successful political and economic transformation, Hungary formally joined NATO in April 1999, thus becoming an official ally of the United States.
On 1 May 2004, Hungary joined the European Union. When Hungary took over the rotating presidency of the Council of European Union in the first half of 2011, transatlantic cooperation with the United States came to the fore and deepened.
After gaining independence
Following the political events of 1989, a new chapter began in the foreign policy of Budapest and Washington: Hungary formulated its intention to join NATO and forge closer ties with the European Union. On 1 January 1989, Hungary became a member of the Generalised System of Preferences, and from 1993 it became possible to import advanced technologies and an agreement was reached on the protection of intellectual property. The creation of opportunities for foreign direct investment (FDI) began: almost 40% of American FDI flowing into the Central and Eastern European region came to Hungary during this period. Since 1989, trade between the two countries has also been facilitated by the American Chamber of Commerce. Through the Hungarian office, domestic companies have a first-hand opportunity to learn about the American market and economic conditions. Atlantic integration has also been a key government strategy in Hungarian foreign policy since 2010. According to current data, NATO-mandated defence spending in Hungary reached 2.11% of GDP by the end of 2024.
Hungarian-American foreign trade
Hungary was able to respond quickly to open market opportunities in the 1990s, with exports to the US growing steadily from 1995 onwards, reaching more than USD 2 billion by 2001. We mainly export machinery and equipment, vehicles and transport equipment, and medicines to the United States.
The value of Hungarian exports to the US has continued to grow over the past decade: between 2014 and 2024, the value of Hungarian exports averaged USD 6 billion per year, with significant growth over the last ten years as well. Compared to 2014, Hungarian exports to the US increased by more than 20% a decade later. In some cases, exceptionally high values can be observed, such as in 2023. In that year, the value of Hungarian exports was USD 9,210 million, a significant part of which constituted medicines (20.1%), vehicles (18.4%) and batteries (8.19%).
US imports to Hungary have shown a similarly favourable trend over the past decade and a half. The main imports from the US to Hungary are machinery and equipment, electronic devices, vehicle parts, chemical and medical products. Compared to 2010 figures, the value of US imports to Hungary nearly doubled by 2024.
In addition to foreign trade in goods, it is also worth taking a brief look at foreign trade in services between the two countries. Among Hungary’s ten most important partners in terms of foreign trade in services, the US ranked third in terms of imports and second in terms of exports in 2024. In terms of imports, US foreign trade in services reached EUR 1,674 million in 2024, accounting for 6.7% of total trade. In terms of exports, services flowing to the US amounted to EUR 3,271 million in 2024, accounting for 9.0% of total turnover. In both cases, it is clear that, in addition to traditional trade in goods, Hungarian-American relations place great emphasis on foreign trade in services too, which is playing an increasingly important role in the global economy as well.
Capital investments
In addition to foreign trade, the volume of capital investments also began to pick up. By 1995, 30 of the 50 largest American multinational companies were already present on the Hungarian market. A significant proportion of them invested in the manufacturing industry. General Electric (Tungsram), Ameritech, US West, General Motors, Ford, GuardianGlass, Alcoa, IBM and Flextronics were among the first American corporations to establish a foothold in Hungary. American companies also began to gain ground in the service sector: accounting firms Arthur Anderson and Ernst & Young as well as numerous legal advisory and financial organisations also appeared in the Hungarian economy.
American investors have therefore long represented stable potential in Hungarian FDI inflows. In 2024, the value of American FDI holdings in Hungary reached EUR 2,746.2 million, while net debt stood at EUR 3,839 million. According to data from the Hungarian Investment Promotion Agency (HIPA), a total of 140 joint projects were registered between 2014 and 2024 by American investors and HIPA. Their total value amounted to EUR 2.4 billion.
The flow of capital investments has led to an increase in the number of American-owned subsidiaries operating in Hungary over the years, and the number of people employed here has also shown a steady rise. In the case of foreign companies, it is always important to consider the added value of various innovative activities in a given sector. US subsidiaries operating in Hungary have been active mainly in the automotive, electronics, IT, ICT, SSC (Shared Services Centre), food, trade, finance and banking, insurance, chemical and engineering sectors.
The share of US companies operating in Hungary in added value was 14% in 2023. In 2023, a total of 1,362 US-owned subsidiaries operated in Hungary, of which 650 were wholly US-owned companies. The annual turnover of American-owned subsidiaries in Hungary reached HUF 10,703,940 million in 2023. In recent years, more large American companies have decided to establish themselves in Hungary: in 2017, Cushman & Wakefield opened its service centre in Budapest, and in 2018, Flowserve Corporation also set up its research and development centre in the capital, investing EUR 10.3 million. In 2021, Diligent Corporation established its Budapest office, and in 2025, Support Services Group Europe announced that it would open another service centre in Szekszárd, in addition to the one established in Budapest in 2020.
All these examples clearly illustrate that Hungary remains an attractive investment location for large American companies, where they can perform high value-added tasks with highly trained Hungarian professionals. The Hungarian data are also noteworthy in regional terms: there are approximately 1,500 American-owned large companies operating in Poland, around 950 such companies in Romania, and 120 American-owned companies registered in Slovakia.
Considering the size and characteristics of the Hungarian economy, the 1,362 American-owned subsidiaries present in Hungary is a significant number in regional terms too.
In 2023, 96,618 people worked for American-owned subsidiaries in Hungary. This figure represented 12.3% of the employees of foreign-owned subsidiaries. In recent years, especially between 2018 and 2021, there have been significant declines in employment figures, but since 2021, the number of people employed has been gradually increasing again.
On the Hungarian side, there are few large companies that have entered the US market and remained permanent players in the American economy. However, there are examples:
- Starschema Inc., a Budapest-based company providing data and analytics services. Launched in 2006, the company entered the US market in 2016 and has been operating in Arlington, Virginia, ever since.
- Another Hungary-based company in the US is Bluebird International, an IT services provider.
- ANY Security Printing Company PLC, which started in Budapest and produces security printing and identity documents, established its US subsidiary, Superior ANY Global LLC, in 2024.
- In the hospitality and restaurant services sector, Simon’s Burger, already well known in Hungary, was the latest to enter the US market in March 2025.
For Hungarian companies, the countries of Central and Eastern Europe are the first step in their international expansion, so few decide to enter the American market. In addition to geographical distance, the main reasons for this might be cultural differences, greater investment requirements and increased competition.
Diplomatic relations and expectations during Trump’s second term
The outcome of the 2024 US presidential elections and Donald Trump’s inauguration in January 2025 have had a clearly positive impact on Hungarian-American relations, which had been burdened by numerous difficulties until then. The previous Biden administration took economic and diplomatic steps against Hungary that severely undermined trust between the two countries and made further cooperation difficult. Among other things, these included the unilateral termination by the US of the agreement aimed at avoiding double taxation, which put many American and Hungarian citizens in a difficult position. In addition, the lack of political discourse and extreme and often misguided communication also made it difficult for the Hungarian government to find common ground with the administration led by President Joe Biden.
The results so far show that a favourable change began in Hungarian-American relations last year, as evidenced by bilateral consultations and meetings. Given the number of areas in which there had been a setback between the two countries in recent years, it will take time to achieve more tangible results. At the same time, it is clear that in some cases, such as visa-free travel to the US, the Hungarian and American parties have managed to hold effective consultations in a relatively short period of time. Another positive development is that both the Hungarian government and President Trump are urging for peace to be established as soon as possible in relation to the war in Ukraine. Another important development in recent months was President Trump’s public explanation of the reasons for and necessity of Hungary’s energy imports from Russia. The more favourable political climate is understandably also having a stimulating effect on economic relations: in September 2025, 11 major American companies announced that they would establish their next subsidiaries in Hungary. This also suggests that, once the areas that are still in question have been clarified, economic relations between the parties may deepen further.
The Trump-Orbán meeting in Washington on 7 November 2025 addressed these issues. Hungarian-American relations have long been a key factor in Hungarian diplomacy, so there is no question that maintaining and developing stable relations is a priority for the Hungarian government.
Summary and conclusion
In the more than 150-year history of Hungarian-American relations, there have been many events that have made it clear that Hungary is committed to the West and thus to the United States. In the years following the regime change, American companies were among the first to enter the Hungarian market, and trade relations and results have shown continuous growth. Today, there are more than 1,300 American-owned foreign subsidiaries operating in Hungary, employing more than 96,000 people. All these figures confirm that Hungarian-American relations go beyond the traditional diplomatic framework. The current Trump administration offers numerous prospects for the development of bilateral relations. The results so far show that the Hungarian government has been able to find common ground with President Trump easily and relatively quickly, so further consultations are expected to be similarly effective.
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