INTERVIEW: Turkey's cement producers brace for impact amid evolving US tariffs

With the evolving US tariff dynamics, cement producers exporting to the US continue to brace for potential impacts. Turkey, which saw the initial announcement as an opportunity to increase exports to the US, finds itself in a disadvantageous position compared to Canada and Mexico. Platts recently spoke to Abdulhamit Akcay, the vice chairman of Turkish Cement, to understand how the industry is preparing itself for business in the immediate and long term with its biggest import partners.

The interview has been lightly edited for length and clarity.

When the tariffs were first announced, you saw this as an opportunity for the Turkish cement industry. Has that changed now?

With the 90-day pause in tariffs, all countries except China face 10% tariffs on cement, but Mexico and Canada have 0%. We were expecting a 25% tariff on Canada and Mexico, which would have made them uncompetitive compared to Turkey, but at this point, they seem to be much more competitive. Therefore, the flow of cement to the US from Mexico and Canada will continue and may increase. I don't know the extent of this increase, but Canada and Mexico are in an advantageous position right now.

As far as Turkey is concerned, we are fulfilling our contractual obligations under yearly contracts and the immediate effect is that the importers will have to pay 10% tax on the FOB price, not the CIF price, so there will be an extra $5-6/mt cost which would have to be absorbed by the US buyers.

Turkey's position is more stable compared to other markets regarding existing tariffs, and if Turkey remains advantageous after 90 days, we will continue to be the leading supplier, but we do expect a remarkable increase in price in 2026.

Have you seen any impact on cement demand since the tariffs announcement?

The question is whether the importers will pass on this cost to customers or not, which will push domestic prices up, and whether the customers welcome this cost increase in the face of great uncertainty?

But if we look at the current flow of shipments to the US, there has been no postponement or cancellation, which means that the importers have absorbed the price for now. However, the real impact will be seen in the next couple of months.

Do you expect any change in trade flows?

Nothing has changed as of now; only the cost has increased for importers, but the whole tariff scenario has put a question mark on Vietnam's position in the US.

Vietnam has dominated exports to the West Coast of the US, but now they are gradually making inroads into the East Coast as well, where Turkey has been in a dominating position. If the tariffs on Vietnam after the 90-day period are at the original level of 46%, Vietnam will be driven out of the picture entirely, as there is no room for the importers to absorb this entire cost. However, with the current 10% tariffs, Vietnam's position is preserved for the time being. After the 90 days, if the US government decides to move back to 46% or a number higher than other countries, the burden on US importers will be higher, so they will be reluctant to import from Vietnam next year.

With that being said, no matter whether the tariff on Vietnam is raised to 46% as previously declared or remains at 10%, given the unpredictability and sudden changes in the trade policies, I expect a drop in imports from Vietnam by 25-30% which means that volume will be channelized to Turkey in the first place and other Mediterranean countries or Saudi Arabia so our position will be better. But if tariffs are flat, like right now, then global distribution of volume will be the same.

If Algeria tariffs are at 30% as indicated originally, then they will be out of the game too.

Besides tariffs, the proposal of a fee on Chinese ships is another thing that is being discussed widely. Is that an area of concern for you?

We have a copy of the order, but some of the points in the executive order are not clear enough to make a sound comment. If it is extended to bulk cargoes, then we are looking at an additional $15/mt cost on cement, which would be catastrophic and would impact total imports into the US.

Besides the additional tax rate, this will also impact freight prices as Chinese vessels won't be chartered by the US, and the remaining vessels will be limited, which will drive prices higher. On the other hand, Chinese vessel freight prices will plunge and boost the supply from the Far East to markets like Africa. So, supply chains will be completely refurbished. Turkey will continue to supply to West Africa, but Vietnam and other sources will become competitive in their exports to Africa, so there will be a new balance, but most impact will be on the US, and this may dampen the appetite in the market, and consumption may go down because of elevated prices.