Machinery makers express optimism following election

By Bruce Geiselman and Karen Hanna 

The return of Donald J. Trump to the White House has some plastics machinery makers feeling optimistic in the wake of the Nov. 5 election. Representatives of some OEMs with overseas headquarters said they believed the former president’s pledge to impose or increase tariffs likely would have minimal impact on their companies. 

“I don’t see a big problem,” said Mark Jones, director of support services in North America for SML, an extruder manufacturer. “If the dollar strengthens, that might make it cheaper for U.S. customers to buy equipment from Austria, offsetting the impact of any possible tariffs. It’s unlikely tariffs would target Austrian goods. We’re unlikely to see tariffs the size of what might be put on Chinese car imports, for example.” 

Trump’s economic plan includes strengthening the U.S. dollar and adopting “a new pro-America system of universal baseline tariffs on most foreign products that rewards domestic production while taxing foreign companies.” 

Much of Trump’s ire seems directed at products coming from China. “My agenda will tax China to build up America,” according to a Trump statement in which he says American wealth and jobs are being exported to that country. 

According to Perc Pineda, chief economist for the Plastics Industry Association, current tariff rates are relatively low, sitting at 3.1 percent for most machinery, with exceptions for equipment imported from countries with free trade agreements. There also are exceptions for some types of manufacturing equipment such as calendaring and injection molding machines. 

“I would be surprised if proposals for higher tariffs in the future on machineries would include those that are used for domestic manufacturing – considering the overall objective to increase U.S. manufacturing activity,” Pineda said. 

One goal of tariffs could be to reshore jobs to the U.S., as manufacturers look to avoid paying duties; however, Michael Wittmann, who is president of Wittmann Global Group, based in Austria, expressed skepticism reshoring could happen anytime soon.  

He said it’s impossible at this time to understand how Trump’s economic policies might affect sales in the U.S., which is the company’s largest single market. 

“We assume that there will be no immediate massive changes to our business activities,” he said. “Even if it is the declared aim of the Trump administration to increasingly transfer industrial activities back to the USA, planning for the corresponding implementation and necessary investments require certain lead times, especially if new locations for such production are being considered. For me, however, the question arises as to where the additional workers for the increased production activities in the USA should come from. The unemployment rate in the USA runs at a low level, and additional personnel are not readily available in any quantity. Actions in these directions could reignite the labor shortages of 2021 and 2022, with all the associated negative effects, such as higher inflation.” 

Wittmann already maintains a production facility in Torrington, Conn., which manufactures automation and materials-handling and drying systems that are integrated with complete injection molding cells in the American market. 

“It is, of course, possible to expand these activities should local demand require it,” Wittmann said. 

Adolfo Edgar, VP of blown film systems for Kuhne in the U.S., Canada and Brazil was doubtful his company — a European machine builder for film and sheet extruders — would be able to set up shop in the U.S. 

“We are a family-owned company based in Germany and export around the world,” he said. “It would be almost impossible to set up manufacturing in the United States.” 

But Edgar sees reason for optimism for an improving business environment under the incoming administration. 

“For our customers, I think there is some optimism for the business environment, and it is expected there will be some economic improvement in the United States now that the uncertainty regarding the election is over and there will be more of a willingness to invest,” he said. “I work with our Triple Bubble [multilayer film] product, and we have no competitors in that area.” 

Edgar added that “sometimes threats of new tariffs are just political posturing. I think cooler heads will prevail.” 

Steve DeSpain, VP of Reifenhäuser Inc., Maize, Kan., which is a subsidiary of a German-based company, also expressed optimism. 

“I don’t expect any impact on us because of tariffs, but I think the election of Trump will certainly help us,” DeSpain said. “Many of our customers have postponed capital expenditures because of the elections. Many customers wanted to wait until after the election.” 

Customers are looking for the extension of tax benefits and possibly new incentives that will help them with their investments, he said. 

DeSpain said he hasn’t heard any worries about tariffs on machinery coming from Germany. 

But the situation might be different for Yizumi, a Chinese manufacturer of injection molding and die casting machinery. 

“Nothing against any person, but if we only talk about the tariff or import duties, any increase would impact the Chinese manufacturer, and the end user, then finally the consumers,” said Joe Liang, acting GM for Yizumi-HPM, Iberia, Ohio, the headquarters for the North American division of Yizumi.