Spanish tile industry could be seriously affected by Trump’s tariff policy
With the arrival of the new president in the White House, there has been a huge revolution in international trade. The imposition of tariffs on different markets is setting off alarm bells in all sectors.
Tense calm in the Spanish tile industry
For the moment, unlike steel and aluminium, which have been hit by a 25% increase, tiles still do not have any new tariffs defined.
A booming market, now in danger
The United States is one of the main markets for tiles in the Valencian Community. According to the report of the Spanish Association of Ceramic Tile and Paving Manufacturers (ASCER), there were sales worth 470.2 million Euros during the last year to this country with a growth of 3.3% compared to the previous year. This figure would be compromised by an increase in tariffs on tiles due to the increase in the price for the final buyer.
A tariff war is the biggest problem
Currently, there is not as much protectionism in the ceramic sector as in other sectors in terms of tariffs. The biggest risk posed to our tile factories is an aggressive response from the European Union to Trump’s tariff policy that leads to an indiscriminate tariff war that could affect this sector much more.
The umbrella of competing countries
Although there is fear among Spanish tile manufacturers, it is also true that the national product has some protection from the US government, which during the pandemic recorded 600% of ceramics from China, thus providing an excellent opportunity for expansion to our market.
Greater risk for our competitors
The top 5 countries that have imported ceramic products to the United States have been Italy, Spain, Mexico, Turkey and India. The Trump government is already currently penalizing Mexico and India with tariffs in a much harsher way, creating an imbalance in the market to the detriment of Italy, Spain and Turkey. This may affect Spanish companies that have part of their production in the affected countries, increasing sales costs in the American country.
Growth expectations despite tariffs
In the current situation, there is a forecast that new customs charges could range between 8.5% and 10%. With these figures on the table, the forecast for growth in the ceramic sector in the USA ranges between 3% and 5%, being optimistic.
The flip side of the coin
On the other hand, there is the fear that this increase in export volume will not be reflected in profits. An unfavorable balance with respect to other competing countries could lead to a price war that limits the profit margin and makes the US market less profitable.
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