Small and medium-sized exporters in Ukraine will suffer the most from the 10% import tariffs announced by US President Donald Trump, according to Ukraine’s Trade Representative Taras Kachka in interview with Ekonomichna Pravda.
However, some Ukrainian companies, especially those in the tech sector, could benefit as a result of differences in tariffs imposed on other countries, Forbes Ukraine reported.
On April 2, the US imposed a general 10% tariff on imports from all countries, including Ukraine. However, competing countries like South Korea, Japan, Taiwan, along with EU member states face even higher rates than Ukraine, Valentine Hrytsenko, CMO of Ukrainian security systems manufacturer Ajax Systems, told Forbes Ukraine.
“Paradoxically, the additional tariffs may actually help Ukrainian companies,” Hrytsenko said. “It’s a chance [for them] to enter or expand in the US market.”
Ajax Systems foresees a 10% increase in prices on its products in the US, Forbes Ukraine reported.
Ukrainian company Esper Bionics, which sells bionic prosthetics in the US, is considering a similar move, the company told the media outlet. The prosthetics cost $22,000 in the US market and are usually covered by insurance. “This could raise our price for this market by 10%,” Esper Bionics CMO Dmytro Hanush said.
He added that for EU companies, the tariffs could be even higher, making it “unclear whether this will give us a competitive advantage or become a problem.”
UBC Group, which exports beer and beverage coolers to the US, could also benefit if tariffs hurt competitors from China, Mexico, and Canada, However, about half of UBC’s materials come from China, and the company is now looking for alternatives and considering local production in Ukraine, Forbes Ukraine wrote.
If Chinese companies redirect their focus there because of US tariffs, “we could face tougher competition in Europe,” the co-owner of the UBC Group told Ukraine’s media outlet, adding “this could affect many companies’ business models.”
Which are Ukraine’s most exposed sectors?
Metallurgical products make up the bulk of Ukraine’s exports to the US, but small and medium-sized exporters are the most vulnerable, Kachka told Ekonomichna Pravda.
“The state might not even notice, but for a small company, losing a $100,000 market can be a serious blow,” he said.
Pig iron accounts for 42% of Ukraine’s exports to the US, according to Kachka. Last year, Ukraine exported $363 million worth of pig iron to the US. Ukrainian producers include Metinvest, Zaporizhstal, and ArcelorMittal Kryvyi Rih, the trade representative told Ekonomichna Pravda.
The 10% tariff for Ukraine is still lower than the 30% for South Africa or 26% for India, both of which export smaller volumes of pig iron to the US, according to Forbes Ukraine.
“It’s too early to assess the impact of the tariffs,” Metinvest said in a written response.
Steel pipes rank second in Ukraine’s exports to the US, Kachka told Ekonomichna Pravda. They’re made by Centravis and Interpipe, and the pipe industry faces the highest risk as Trump has already imposed 25% tariffs on this category.
According to Ukraine’s representative, this could seriously affect Ukrainian producers, even though they are certified and capable of entering other markets.
Exports to the US may decline, Centravis CEO Yuriy Atanasov told Forbes Ukraine. According to the media outlet, last year the company exported 3,000 tons of pipes to the US.
The Ukrainian steel industry association, Ukrmetallurgprom, estimates that Interpipe Niko Tube may cut production by 36%, Forbes Ukraine wrote.
Will Ukraine respond with its own tariffs?
Ukraine does not plan to respond to the US tariffs with retaliatory measures, Kachka told Ekonomichna Pravda in an interview.
“I’m not sure we should. We all know how sensitive our broader dialogue is with the US. Our interest is to lift the tariffs, not escalate tensions,” he said.