Hungary and the United States are holding behind-the-scenes negotiations on a potential business agreement aimed at mitigating the negative effects of US tariffs.

Deputy Foreign Minister Levente Magyar said the agreement would include cooperation in the space industry and the development of military capabilities. He cautioned that the deal is not expected to be finalised quickly, but expressed the hope that the two countries could agree on various projects in the fields of energy, defence and space exploration.

"We are discussing specific, unique projects that could be included in such an agreement. We hope to accomplish significant things that serve the interests of the Hungarian people," Magyar said.

Whilst the agreement currently has no set deadline, Magyar noted that the US administration is "very busy" at the moment.

Hungarian Prime Minister Viktor Orbán has long positioned himself as one of Donald Trump's most vocal supporters in Europe, and in recent months hinted that Hungary is preparing a "new economic deal" with Washington within six months to counterbalance the impact of potential tariffs.

"The tariffs will be negative for us, but we are negotiating other economic agreements to offset them," he said in an April interview, adding that Hungary is also seeking to attract US investments.

A study by Vienna's wiiw institute found Hungary would be the sixth hardest-hit country globally if Trump's tariffs take effect. Hungary's total export loss is estimated at 0.37%, almost three times the EU average. Long-term effects could see the loss rise to 0.46% due to knock-on declines in European industrial output. The National Bank warned that tariffs could shave off 0.5pp of Hungary's GDP in 2025.

Although Hungary, as an EU member, cannot conclude independent trade deals, Magyar said he remained optimistic about the possibility of reaching an agreement. The talks come as Hungary's export-heavy automotive sector faces potential risks from the introduction of US tariffs. The introduction of the tariff on EU imports was delayed until 9 July.

While Peter Szijjarto discussed energy issues in St. Petersburg and reassured his partners that Hungary would rely on Russian Energy, his deputy went on a two-day international tour to the UK and Canada as part of broader efforts to strengthen bilateral relations and energy cooperation, according to the statement issued by the Foreign Ministry.

In London, Magyar stressed the importance of maintaining dialogue even with allies who take a different stance on the war in Ukraine, highlighting energy as a potential breakthrough area in ties with the UK. Talks included discussions on a possible joint nuclear reactor project with Rolls-Royce SMR, indicating a broader pivot towards Western energy partnerships and possibly reducing reliance on Russian energy.

In Toronto, Magyar said Hungary has a strategic interest in building strong ties with Canada, particularly in energy. He noted Canada's vast natural resources and advanced nuclear technologies as key areas for potential cooperation, with further talks on concrete projects expected.

Independent media pointed out that in London Magyar hinted that the controversial "transparency bill", seen as Russian-type legislation to silence critical media and NGOs, could be put off the agenda.

Speaking at an event hosted by the Hungarian Embassy, Magyar told Reuters that voting on the bill was delayed earlier this month because of "internal debates".

Whilst it could theoretically return to the agenda in the autumn, "I am not sure it will ever come back," he added.