Ceramic exporters get setback over Trump’s tariff

Reza Mahmud :

The 37pc tariff imposed by US President Donald Trump has brought setback for the struggling ceramic products exporters.

The entrepreneurs of the ceramic industry said, already grappling with the gas crisis and tight profit margins for loan repayments, they had been hoping for a recovery from the 2023-24 downturns, as interest from some US buyers showed promise.

But Trump’s step of imposing such a hard tariff brings a setback for these exporters.
When contacted, Rafiquzzaman Bhuiyan, Chief Executive Officer of Fu-Wang Ceramic Industry Ltd, told The New Nation on Friday, “Trumph imposed 37 pc tariff obviously harms Bangladesh’s tableware exporting to the US. Though the growth is now out of the question – US importers must bear the full burden of the additional duty, even for shipments already at a US port.”

He said, the government has to take appropriate measures to boost tableware exports amid the US’s imposing such tariff.

Entrepreneurs of the sector asked for arranging suitable incentives for the sector while trying to get especial preferences from the US over exporting tableware if possible.

Several entrepreneurs recalled how the withdrawal of duty-free market access under the Generalized System of Preferences (GSP) led to mass order cancellations, putting exporters in a difficult position in 2013.

We are concerned that existing US orders might be scrapped again this time. Fortunately, our industry no longer relies heavily on the US market, one of the industry insider said.

Data from the Export Promotion Bureau, Bangladesh’s ceramic exports dropped from $43.38 million in FY23 to $33.09 million in the last fiscal year. Tableware and kitchenware, the primary export categories, saw a decline from $39.9 million to $30.16 million.

Since losing GSP benefits in 2013, the US market has played a marginal role for Bangladeshi exporters. Still, ceramic exports to the US further shrank from $4.1 million to $2.76 million.
“The ceramic tableware industry is highly competitive and resilient; all we ask for is fair treatment,” said Rafiquzzaman.

One of the ceramic tableware exporters said, Akij Ceramics, with its cutting-edge facilities and extensive research and development, has rapidly expanded in the European Union, achieving over $12 million in annual exports within just four years-an advantage made possible by duty-free access, which China, the world’s largest exporter, does not enjoy.

Before the additional 37% tariff, Akij Ceramics had been working on new products for US buyers, adapting to the regular import duty.

“This tariff hike will push up product prices in the US. The real question is whether US consumers will accept the added cost or if importers will shift the burden onto exporters,” an official from Akij Ceramics said.

He said, Europe, Russia, and India remain Bangladesh’s top ceramic markets.
The additional tariff will dampen US demand, causing an immediate slowdown and squeezing profit margins for exporters, they said.

Despite the setback, industry leaders remain optimistic about the mid to long term.
As most exporting nations are subject to these tariffs, our competitive standing will largely remain unchanged,” said Rafiquzzaman.

One of the ceramic tableware exporter said, they are currently evaluating the impact of these new tariffs on the US market, while hoping the government can negotiate a reduction for Bangladesh.