The decision to introduce 30 percent tariffs on products from Bosnia and Herzegovina (BiH) exported to the United States (U.S.) market represents a serious challenge for all exporters, according to the business sector.
U.S. tariffs of 30 percent on imports from multiple countries, including BiH, came into effect on August 7th, affecting nearly 70 countries worldwide.
The consequences will also be felt by the BiH business sector and companies that had product placement on the U.S. market, stated the Employers’ Association of Canton Sarajevo (CS).
“The defense, metal, and wood industries, which had begun exporting and achieving results on the U.S. market, will be affected. Of course, 30 percent tariffs are extremely high, which will result in BiH products no longer being competitive on the U.S. market, as it will lead to a significant increase in prices,” said the Association’s director, Suad Eco.
He expects that in the coming period, BiH companies operating on the U.S. market will face many challenges and will have to adjust their prices in order, as he explained, for clients to find it worthwhile to have products from BiH.
The tariffs will hit the defense industry the hardest, but also the metal, electrochemical, wood, and food industries, believe BiH businesspeople.
Although the final tariff rate is somewhat lower than the previously announced 35 percent for BiH, such a measure will make it more difficult to place BiH products on one of the world’s most important markets and will reduce their competitiveness compared to producers from countries that enjoy more favorable trade agreements.
In addition to the food, defense, and wood industries, the Chamber of Commerce of the Federation of BiH (FBiH) also expects the U.S. tariffs to impact the automotive industry.
“Many of our companies work for European suppliers and are indirectly affected on the one hand. On the other hand, we can expect an overall blow to the economy of this region. Exports from the wood industry sector may also suffer a major hit. It’s possible that production will be relocated to another continent from which it will be easier to export. European suppliers will generally face problems due to the increased tariffs, so a decrease in exports to the U.S. market is also expected,” said Armin Hodzic, director of the energy sector at the FBiH Chamber of Commerce.
The effects of the U.S.-imposed tariffs are difficult to calculate and project in terms of total damage to the BiH economy. Regarding measures to mitigate the negative effects of the tariffs, it is necessary to involve all relevant actors from BiH and to assess the responses that the most significant trade partners will take. Currently, there is a readiness among European Union (EU) actors for reciprocal measures, but at the same time, there is a prevailing call for dialogue in the interest of avoiding extreme measures and overcoming this situation.
