Importers in the US and exporters in Bengal are locked in tough negotiations to cushion the impact of the steep tariff imposed by the Donald Trump administration, hoping to settle terms before the Christmas season.
The 50% US tariff, which took effect on August 27, has severely impacted Indian sectors like seafood, leather, and garments, leaving exporters worried about massive job losses during what should be their busiest period.
Seafood talks
One US importer of frozen seafood initially asked a Bengal-based exporter to split the additional 50% tariff equally. The exporter refused.
The importer then asked the exporter to bear 10% of the added cost, but the exporter turned it down again.
The two finally settled on a 10-cent discount per kilo.
In the seafood sector, the stakes are high. The demand for shrimp, crab, and frozen fish during Christmas is significant, and despite the tariff hike, US importers are still placing orders, confident that consumers will absorb the extra cost during the festive season.
“Importers in the US feel that because of the festival season demand, consumers would not mind paying extra,” said a seafood exporter.
Many exporters in Bengal said they were receiving calls from US importers willing to renegotiate prices to keep supplies flowing for the festival season. However, several also noted that overall demand remains lower than in previous years.
Exporters said supermarkets, retailers, restaurants, and caterers in the US are placing bulk orders, especially ahead of Thanksgiving Day.
Since the tariff came into effect in late August, exporters across Bengal have grown increasingly apprehensive about the long-term viability of trade with the US.
While the current festive demand is keeping ship-
ments going, many expor-
ters fear this could be short-lived.
“Despite the steep additional tariff, importers are placing orders. But this demand could be short-term. We are worried about sustaining long-term business in the US if the 50% tariff continues,” said Rajarshi Banerji, president of the Bengal region of The Seafood Exporters’ Association of India.
Exporters said most US-bound consignments are shipped until October, with a slowdown after that. Demand typically picks up again in mid-January.
Leather exports
Similar negotiations are underway in the leather goods sector, exporters said. While demand remains strong for bags, wallets, belts, and industrial gloves, many are unsure how long the trend will last.
“It takes around three months to manufacture leather items and another couple of months to ship them to the US,” said Zia Nafis, member of the Committee of Administration, Council of Leather Exports (eastern region).
“So it is too late for US importers to place fresh orders elsewhere for the Christmas season. The customers in the US need the goods, and retailers cannot afford to keep the shelves empty.”
Nafis added that exporters in India would also be inconvenienced if they did not agree to offer discounts for Christmas orders.
Products made for the US can’t be easily redirected to other markets due to differences in design and size, Nafis said. “The European and US market products are different... So, it is not possible to sell products manufactured for the US to Europe or other countries,” he said.
Kevin Juneja, managing director of JC International, which exports leather bags and wallets from its factory at the Calcutta Leather Complex in Bantala, said price negotiations are still underway for Christmas orders.
“Goods are being shipped for Christmas and we are giving 2-3% discounts on average,” said Juneja. “However, we apprehend that orders will slow down from November.”