News

Jun 21, 2023

Mold industry pushes Biden hard to keep China tariffs

Steve Dungan, a controller at D1 Mold and Tool LLC in Alexandria, Ind., didn't

Steve Dungan, a controller at D1 Mold and Tool LLC in Alexandria, Ind., didn't mince words about how the tariffs on molds from China have benefited the business in comments to the Office of the U.S. Trade Representative. He simply submitted this group photo of the employees who manufacture the complex die-cast molds and thermoform tooling.

United States mold and die makers are pushing Washington to keep 25 percent tariffs on Chinese molds, citing crucial advantages like sales and jobs growth in passionate pleas to the Office of U.S. Trade Representative Katherine Tai.

President Joe Biden's administration is weighing whether to reduce or eliminate China tariffs imposed by former President Donald Trump in 2018, but so far it has kept them in place as it continues its review.

About 60 of the 200 members of the American Mold Builders Association have flooded the trade agency with comments supporting the tariffs, the group said in a Sept. 22 news release.

AMBA lobbyist Omar Nashashibi told USTR that the section 301 import taxes are helping some 1,380 businesses generate more than $6.4 billion in annual sales and employ 35,000 Americans with an average annual salary of $56,203.

"We believe the sheer number of mold manufacturing establishments in the U.S. counters any arguments made by those requesting an end to the tariffs or an exclusion that no domestic alternative to Chinese mold imports exists," Nashashibi wrote.

But the debate is not over.

Because of how the government review is structured, those who opposed tariffs in the past, like plastics molding companies or importers, will now have a chance to submit their own formal comments to USTR.

A flood of more than 200 anti-tariff comments in late 2018, many from plastic molding companies, prompted the Trump administration to lift them for a year.

AMBA argues that the U.S. mold industry's capacity utilization rate of around 75 percent means American companies are a strong position to meet current demand and take on more work in the future.

USTR will consider the comments in its review of the 25 percent tariffs as well as 7.5 percent tariffs on more than 10,000 imports from China implemented July 6, 2018.

The tariffs then were suspended Dec. 28, 2018, at the request of importers claiming a lack of domestic mold shop supply only to be reinstated a year later following a push by AMBA and other supporters.

"In 2019, AMBA members and other manufacturers filed more than 150 comments and succeeded in calling on the USTR to reinstate the tariffs on plastic injection molds from China," said Kym Conis, AMBA managing director. "This industry is organized and mobilized to stand up to China's trade practices and will urge the Biden administration to keep in place this important trade tool."

Before the tariffs, Chinese shops sold molds and dies for as much as 40 percent lower than a comparable product manufactured by a domestic shop. As a result of the tariffs, Chinese mold shops reported between a 10 and 30 percent drop in revenue, helping level the playing field, Nashashibi said.

Not a subscriber? You can get a subscription to Plastics News here.

The tariff helps Wm. J. Kline & Co. Inc. in Woodstock, Ill., compete effectively, leading investments to enhance capabilities and employ hard-working Americans as tool makers, President Mark Emricson told USTR.

"We beg you to consider a continuation of the List 1 action," Emricson said. "Since the tariff was enacted in 2019, our company customer base, volume of molds built and annual sales [have] increased. All of this has given us the opportunity to invest in more efficient machinery and to increase the wages of our highly skilled employees. This increase in volume also leads to training younger workers in a trade that is very much needed in the U.S."

Matt Palazzolo of MC Molds Inc. in Williamston, Mich., wants the levy against Chinese mold imports to remain in place or be increased to protect good-paying American jobs and the domestic supply chain.

"If COVID has shown us anything, it is that we must grow our manufacturing base so we are not reliant on other countries to provide our goods," Palazzolo told USTR.

Dustin Carlson, president of DMC Mold & Tool Corp. in Cary, Ill., put it this way: "We benefit by providing the necessary workforce and supply chain on U.S. soil to keep the promise of made in America. With the tariffs in place, we have been able to see the resurgence this county deserves."

Sean Connole, president of Port Erie Plastics in Harborcreek, Pa., called the mold tariffs "critical to our national and economic security" and also emphasized that the U.S. industry has the capacity to meet current and future demand.

"These tariffs help support small and medium-sized businesses like Port Erie Plastics. Please consider our perspective when making your decision," Connole said.

Mark Brown, CEO of Baumann Tool and Die, a Zeeland, Mich.-based manufacturer of plastic injection, foam, vacuum and urethane molds for the furniture, aviation, leisure, automotive, medical industries, also described how the tariffs have benefited the business.

"We are seeing an improved economic situation while the tariff has been in place. We still lose out on some molds, but the pricing is much more competitive. Without the tariffs, we estimate that we would not have made 20 percent of the molds we made in the past year," Brown said.

Dun-Rite Machine Inc., also in Zeeland, had been hit hard by Chinese competition for 20 years before tariffs leveled the field, Mitch Zuverink, a tool designer, told USTR.

"The future of our industry in the USA looks bleak unless more work stays in the States and [is] not sent abroad," he added.

Matt Metcalf, CEO of Colonial Machine Co. in Kent, Ohio, agreed.

"Many of our customers ask us to quote against molds made in China. Straight up there is no way we can compete and still be able to employ and pay our workforce the wages they deserve," he told USTR.

A picture was worth a thousand words for Steve Dungan, a controller at D1 Mold and Tool LLC in Alexandria, Ind. He simply submitted a group photo of the employees who manufacture die-cast molds.

Ron Schnabl, owner of Milwaukee Mold Industries Inc., said the profession is crucial for a strong U.S. manufacturing base.

"The Chinese are subsidizing my industry with government-purchased machinery and real estate, which makes it hard for us to compete. I just want an even playing field and we'll be fine. Keep these tariffs going to keep our manufacturing strong in the U.S.," Schnabl told USTR.

Geoffrey O'Brien, CEO of mold maker Proper Group International in Warren, Mich., told USTR that the tariffs helped blunt the push by major corporations to buy molds in China.

"The large corporations began to purchase molds from China due to the low labor cost and low material costs," he said. "This has destroyed the industry until the July 6, 2018, [tariff] action took place."

O'Brien said the tariffs need to be made permanent to help rebuild the skilled workforce in U.S. mold building — Proper employs 250 skilled technicians — or at least extended for 10 years.

He also urged USTR to examine tactics by importers designed to avoid tariffs, including overstating the amount of a mold's cost attributed to engineering and design work, and routing molds from China through Canada before delivery in the U.S. He said tariffs should be put on molds imported from Canada.

"There are many tricks being done by large corporations to continue to purchase molds from China," O'Brien wrote. "It is clear that these loopholes need to be closed."

Robert Binyon, vice president of AJ Tool & Manufacturing LLC in Germantown, Wis., also said importers are bringing in components of molds and doing final assembly in the United States as a way to avoid tariffs.

"This workaround should be reviewed and tariffs adjusted to make sure that any component that produces molded plastic parts is subject to the tariff," Binyon said.

Bradley Cook, president of Iowa Mold & Engineering Inc., in Belle Plaine, Iowa, said the tariffs helped his company win business and kept the industry better prepared to ramp up manufacturing of critical medical parts when the coronavirus pandemic struck.

"We have seen an increase in our sales and an increase in many on our customers keeping their mold production in the U.S., since the tariffs were put in place," he said.

"We were able to maintain employment levels through COVID and provide emergency assistance to medical companies to help meet the needs of the country during the pandemic," Cook said. "This would not have been possible without the tariffs."

Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Plastics News would love to hear from you. Email your letter to Editor at [email protected]

Please enter a valid email address.

Please enter your email address.

Please verify captcha.

Please select at least one newsletter to subscribe.

View the discussion thread.