More than half of the requests for duty exemption came from injection molding companies in the automotive supply chain, arguing that the tariffs would increase costs or slow vehicle development.
For example, Yanfeng US Automotive Interior Systems LLC has made more than 80 inquiries. Forteq North America Inc. filed more than 20, and International Automotive Components Group North America Inc. and Faurecia US Holdings each requested more than 10 duty exemptions on molds.
IAC noted that its Chinese mold supplier was selected directly by its customer Ford Motor Co. IAC added that the U.S. mold industry lacks the capacity to meet its needs.
The Center for Automotive Research in Ann Arbor, Michigan said the removal of tariffs will help lower US auto prices, but it will hurt the mold makers that supply the industry.
“It’s good for cars, it’s bad for local mold makers,” said Kristin Dziczek, CAR’s vice president for industry, labor and economics. “The mold industry in the US is no better, no worse than it used to be, but the protection against Chinese mold would have been an advantage.”
While the automotive injection molding industry loudly complained that tariffs would bite them, U.S. mold making has clearly seen its own deteriorating commercial image in recent years.
The U.S. mold trade deficit skyrocketed from $ 1.14 billion in 2015 to $ 1.53 billion in 2017, according to a recent report by the Washington-based Plastics Industry Association that said the US imports 3.5 times as much molds when exporting.
The trade deficit with China rose from $ 390 million to $ 498 million in these three years.
However, industry trade data also suggests Canada may be the bigger challenger to the US industry’s trade image.
The US mold makers consistently have their biggest trade deficits with Canada. It reached $ 884 million in 2017 and rose from $ 690 million in 2015, according to the association’s report.
AMBA Executive Director Troy Nix said survey data collected from processors is now showing a trend toward more sourcing of molds in the United States. Nix added that the industry will be watching whether the removal of tariffs on Chinese forms slows or reverses this.
Rothenbuecher said the removal of tariffs on Chinese molds would “simply harm” US moldmakers, but he also said the US government may be concerned about signs of overcapacity in the American moldmaking sector.
“It has been reported that the US mold industry may have, or has, overcapacity with the work that has been returned to US mold makers,” Rothenbuecher said. “This consideration may have contributed to why shapes are now exempt from customs.”
Several U.S. injection molding companies have argued that lead times for U.S.-made molds are increasing because the industry is busy.
For example, Mack Molding Co. said in its application that it goes overseas when US capacity is tight: “With the recent robust economy, many of the domestic mold makers have had a workload that makes it impossible for us to get quick deliveries of tools to support our customers, so we’ll have the tools built in China and fly the molds back to the US. “
Also, custom injection moulder Sajar Plastics told USTR that it is facing long mold lead times in the US and is currently having 28 molds built in China.
“US tool shops typically take 18-20 weeks to complete each tool shop,” Sajar wrote. “Many of the tools we currently have in China will be ready to ship within the next four weeks and be in production for the next 10 weeks.”
USTR said the wage exclusions will apply retrospectively to the original July 6 tariff announcement and will last until December 28, 2019, one year after the exclusions were officially posted in the federal registry.
What happens after that is not clear, but some industry watchers said they could be extended.
The Plastics Industry Association said it had notified the Trump administration that the tariffs had damaged parts of the U.S. industry and worked with its members on the process of elimination.
“While the industry appreciates the fact that the elimination process works, and during [the association] provided information and guidance to members on how to apply for these exclusions. “We believe the government should negotiate an end to this trade war with China and work towards reliable, stable policies that the US plastics industry can use to plan and grow its business.”
Audrey LaForest and Bill Bregar contributed to this story.