Anil Taneja,
Director, LITOSonline.com
After more than 3 months of tariffs wars, the turmoil in international trade, the general uncertainty that has worsened, we can make some preliminary conclusions-
1. Some kind of tariffs will continue to be imposed by USA on its imports, though possibly at lower levels than those currently announced. The US is expected to earn US$ 300 billion this year from custom duties, a huge and also a vital amount because it has a big deficit. Moreover, a law has already been passed in the US reducing taxes and increased spending, so the custom duties can become a new and important source of revenue.
2. Tariffs will likely continue even in the next administration. The revenue will be too big to eliminate , the businessmen and consumers will end up adapting to it.
3. Even if some stability is restored in a few days, weeks, or months, with respect to tariffs, tremendous damage has already been done to the natural stone industry. New investment has crashed. The prolonged uncertainty has led to US importers becoming cautious in their purchases. The custom duties to be paid by importers means several financially weak companies may go bust. But stone exporters which are seriously dependent on the US market, will also be facing serious financial stress due to less orders, or purchase orders being paused, and the cash flow in their companies becoming tight.The stone industry, already grossly oversupplied and undergoing a painful period of downsizing, has been put under even more stress.
4. Tariffs are affecting not only the natural stone industry, but also quartz and porcelain, in equal measure. So there is no relative advantage or disadvantage for any particular building material.
5. Every decade or so, the stone industry is taught the same lesson- do not depend too much on one single market, or one single product.
6. We are probably entering a new era in world trade, also relevant to the natural stone industry, where the business environment is more protectionist, less globalised, leaning perhaps towards more regional trade. Protectionism comes in different forms, not just tariffs. For example, the EU will be charging a carbon tax on imports from non-EU countries soon. Other countries have their own ways of keeping imports out and defending their local industry.
7. We come back to the same conclusión as always- the urgent need to develop new applications which will also mean looking for new types of customers, not just new markets, and the need to diversify as much as possible. The need to make the case for using natural stone in a more modern way with arguments that connect with today's consumers sensibilities. Different consumers have different sensitivities, one size fits all, McDonald's style, is not the way.
