Back in July 2018, President Trump implemented a 25% tariff on China-made plastic injection molds. Unexpectedly in December, the Trump Administration lifted the tariff for at least one year - a decision many say is likely to hurt American mold makers but help U.S. plastics companies that supply automakers. Below we share some insight on the tariff suspension, what it means for mold makers, and what it ultimately means for you.
While the exact reason why the tariff was lifted is still unknown, there are quite a few speculations lingering. According to Automotive News, “more than half of the tariff exemption requests came from injection molding companies in the automotive supply chain arguing that the tariffs would raise costs and even slow down vehicle development”. Others believed that higher tooling costs would risk many jobs and drive U.S. manufacturing to be less competitive in the industry. Finally, many were concerned whether or not the U.S. mold makers could keep up with automotive demand.
What does this mean for mold-makers?
For automotive companies, this is great news since it helps keep U.S. car prices down, but for our fellow mold makers, we are back to competing with China for business. The tariffs helped drive business back to the U.S., but with the suspension for at least one year, U.S. mold makers must dial in on their competitive advantages. It really boils down to - how do shops make molds to be better, faster, and more cost efficient for the market?
What does this mean for you?
If you are a company that regularly utilizes plastic injection molds from China, then the tariff suspension is promising for you! Prices are low and the supply is readily available until at least December 2019. Although, at that time the tariff could be put back into place. At Pleasant Precision Inc., we’ve implemented a few strategies that can help prepare your team now and in the future.
Keep in mind that this tariff suspension is new and ever-changing. Therefore, it is important to stay informed of new developments on the issue. If you would like to learn more, please contact us at 419-675-0556.