The United States Lifted Tariffs on Chinese Injection Molds
Many argued to USTR that since mold purchasing takes months and the contracts for these molds were signed before the tariff details were discussed, they could not plan for the 25 percent tariffs. Plastikon Industries Inc., for example, asked for what it called a "one-time exclusion" for molds ordered from China in late 2017 for a project for a U.S. automaker. "Due to the timing, significant size and technical requirements for the U.S. vehicle launch, however, the company cannot re-source the items of concern to a U.S. supplier," the company said. It said a 25 percent tariff would "impart significant economic hardship," possibly forcing it to cancel the multiyear contract with the automaker and risking the jobs of 600 workers at one of its plants in Kentucky. Other companies, including plastics housewares maker Keter U.S. Inc., made similar points, arguing that higher tooling costs would make its U.S. manufacturing less competitive and risk jobs. Plastikon said it had taken steps to source more molds in the United States. "We fully support the strategic objectives of shifting manufacturing to the U.S. and have already taken steps to source future molds from the U.S. and from fair trade countries," Plastikon told the USTR. Automotive reaction More than half of the requests for tariff exemptions came from injection molding companies in the automotive supply chain and argued that the tariffs would raise costs or slow down vehicle development. Yanfeng U.S. Automotive Interior Systems LLC, for example, submitted more than 80 requests. Forteq North America Inc. submitted more than 20, and International Automotive Components Group North America Inc. and Faurecia U.S. Holdings each requested more than 10 mold tariff exemptions. The Center for Automotive Research in Ann Arbor, Mich., said lifting the tariffs will help hold down U.S. car prices but hurt mold makers who supply the industry. "It's good for autos; it's bad for domestic mold builders," said Kristin Dziczek, CAR's vice president of industry, labor and economics. "The mold industry in the U.S. is no better, no worse off than they were, but the protection from Chinese molds would have been beneficial." While the automotive injection molding sector was vocal in complaining that tariffs would bite them, the U.S. mold making industry has clearly faced its own worsening trade picture in recent years. The U.S. trade deficit in molds shot up from $1.14 billion in 2015 to $1.53 billion in 2017, the last full year figures are available, according to a recent report from the Washington-based Plastics Industry Association, which said the U.S. imports 3.5 times as many molds as it exports. The mold trade deficit with China rose from $390 million to $498 million in those three years. But industry trade data also suggests Canada may be the bigger challenger to the U.S. industry's trade picture. U.S. mold makers consistently have their largest trade deficits with Canada. It reached $884 million in 2017, and tha...
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