Trump election buoys some manufacturers' hopes

By Karen Hanna, Bruce Geiselman and Lynne Sherwin

Tariffs and a possible sea change in other economic policies have OEMs and processors looking to the start of a second Donald Trump presidency with optimism and uncertainty. While the election answered some questions, many remain as to how the incoming president could shake up manufacturing. 

“It’s still early to see how post-election activities will increase. We expect to see an increase in new equipment purchases come the first of the year for all those customers who have been holding back to see what happens with the election, the economy and inflation,” said Sonny Morneault, president of Wittmann USA. “Ironically, history shows us that the election has zero impact, regardless of how they go, on decision-making but always prevents those decisions until after the election.” 

Trump will mark the beginning of his second term with his official swearing-in at noon Monday, Jan. 20.

In response to Plastics Machinery & Manufacturing’s annual machinery-buying survey, at least one processor said the election would have a significant influence.  

“If Democrats win control and current economic policies continue, then we will greatly reduce spending. If Republicans win and can create a more favorable long-term economic situation, we will invest a lot more,” wrote the processor, who wished to remain anonymous. 

Others look to simply stay the course. 

Robot manufacturer Sepro North America, for example, isn’t altering its outlook. Its focus remains on its customers, said Anthony “A.J.” Zambanini, director of sales and marketing. 

“If we keep helping customers to be successful, we have an opportunity they’ll keep coming back to us for their automation and robotics needs, no matter what happens with tariffs or policies,” he said. 

Peter Zut, VP of sales and service for extrusion for KraussMaffei, sounded a similar note: “As a company, we remain focused on our operations and goals, regardless of the political landscape. However, we recognize that the outcome of the presidential race can impact various sectors, including economic policies and regulations that may affect our industry.” 

Tariffs under consideration  

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,” according to a campaign webpage. While Trump argues that approach will boost American manufacturing, the policies could have starkly different effects on manufacturers, depending on where they’re located. 

The election ramifications are a “mixed bag,” said Laurie Harbour, a partner at Wipfli LLP and longtime consultant to molding and mold making shops. In addition to possibly raising tariffs, she noted that Trump will soon be renegotiating the United States-Mexico-Canada Agreement, a trade agreement he trumpeted in his first term in office. 

Taken together, the policies could mean much higher costs for companies that need to import parts, equipment and raw materials, but also could advantage domestic manufacturers.  

According to Perc Pineda, chief economist for the Plastics Industry Association, current tariffs on equipment 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 (IMMs).  

But Trump has made statements supporting tariffs of 25 percent or more. 

Pineda cautioned across-the-board tariffs could be disruptive. 

“If, in fact, we have tariffs that are very high and prohibitive, then we would have some short-term volatility in the market, if we can’t get the inputs to production. But if we’re serious about reviving domestic manufacturing, then I think the right trade policy would be to provide some carve-outs for those things that we need to make things here, and that includes all this equipment for plastics, some of which we don't make in the United States anymore, and some materials that go into it we don't make anymore,” Pineda said. 

Poised to benefit 

If higher tariffs do go into effect, it’s manufacturers with U.S. operations they’re designed to help. But even among representatives of OEMs in that segment, views are mixed. 

Gary Carr, VP of sales for Bekum’s operations in the U.S., voiced optimism. 

“The discussion of tariffs on foreign-built products coming into the U.S. marketplace is certainly one we are watching closely, as it could help positively impact our U.S. manufacturing operation,” he said. 

In addition to its plant in Williamston, Mich., where it builds its Eblow 407D extrusion blow molding machines, Bekum has sites in Austria and Germany. 

Steve DeSpain, VP of Reifenhäuser Inc., a Maize, Kan., 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 extensions 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.  

On the other hand, Masahiko Miyajima, president of Nissei America, had mixed feelings. Based in Texas, the subsidiary assembles IMMs made in Japan. 

“We are currently expanding the San Antonio factory and planning to assemble machines up to 3,000-ton class in the future; however, we are also very apprehensive about the new policies to be set by the upcoming Trump administration,” Miyajima said.  

View from elsewhere 

OEMs with operations largely outside the U.S. are eyeing proposed tariffs differently.  

One good thing about the election everyone could agree on? At least it’s over.  

“It is important that the election is decided. We expect a positive impact; however, we are unsecure about possible custom duty increases,” Sumitomo (SHI) Demag CSO Anatol Sattel said.  

For Mark Jones, director of support services in North America for SML, an extruder manufacturer, Trump’s proposed policies have their pros and cons.  

“I don’t see a big problem. 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.”  

But Martin Baumann, managing director of Arburg Inc., said he believes any increases could hobble the industry. 

“If the 10-20 percent tariffs that have been proposed are actually imposed, that would not be as good for our industry – as it would drive up prices,” he said. 

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

Joe Liang, acting GM for Yizumi-HPM, the headquarters for the North American division of Yizumi, warned any increases eventually could be felt across the supply chain, as manufacturers pass on the costs.  

Based in Foshan, China, Yizumi manufactures IMMs, and die-casting and additive 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,” Liang said.   

Crossing borders 

China is among the countries that have especially incited Trump’s ire. So is Mexico. That could have a particular impact on OEMs that in recent years have made investments in that country, in part to avoid supply chain headaches and markups. But Pineda said the strategy of investing in Mexico might continue to provide some payoff.  

“I think to some extent it’s still worthwhile ... unless the tariffs would actually violate or dismantle the free trade agreement in Mexico, which I doubt it will. So, there is reason to continue expanding in Mexico, and also they have labor,” Pineda said. 

Engel and Haitian both have been expanding their presence south of the border.  

Last year, Engel announced last year an investment in Queretaro, Mexico, of about $31 million to build its 10th production facility, to complement its North American headquarters in York, Pa. The decision reflects the Schwertberg, Austria, company’s regional approach focusing on the Americas, Asia and Europe. 

“We are confident that customers in the United States of America, Mexico and South America will all benefit from the capacity and expertise delivered by this expansion,” said Vanessa Malena, president of Engel North America, as the company looked ahead to the project in Mexico.  

Meanwhile, in 2023, Haitian opened its newest plant, in Acatlan de Juarez, in the metropolitan area of Guadalajara, Mexico; early last year, the Ningbo, China-based company began shipping its Mars IMMs from the site to the U.S. 

As the world’s biggest maker of IMMs, Haitian has some flexibility, noted Glenn Frohring, co-owner of U.S. subsidiary Absolute Haitian. 

“We are keeping our eye on the possibility of tariffs,” he said, “but we hope those are limited to the industries that make sense to protect such as automotive and pharmaceutical. As far as IMMs, there is no significant U.S. industry to protect. Haitian has a large global manufacturing footprint and has the flexibility to pivot to different manufacturing sites if necessary.” 

Coming to America? 

While it might offer some advantages, moving manufacturing to the U.S. is easier said than done. One issue might be availability of labor, which has hamstrung the manufacturing community in recent years.  

“We are a family-owned company based in Germany and export around the world,” said Adolfo Edgar, VP of blown film systems for Kuhne in the U.S., Canada and Brazil. “It would be almost impossible to set up manufacturing in the United States.”  

But Edgar sees potential 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.”  

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

Regardless of the intent of tariffs, Michael Wittmann, president of Wittmann Group, based in Austria, questioned whether the U.S. manufacturing industry has the capacity to take on much more work. 

“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.”  

However, if necessary, he said Wittmann’s U.S. operation, which manufactures automation and materials-handling and drying systems, could expand. 

Wittmann’s Morneault said he was anticipating “the continuation of reshoring, for sure, but also, we expect some inflationary pressure on imports, but we are optimistic these will be minimal for EU products.”  

Manufacturing closer to home 

Processors, too, are gearing up for the possibilities of higher costs, as well as the prospect of reshoring.  

Consultant Harbour noted that the domestic mold making industry has been decimated in recent years, as scores of shops have closed. Molds and dies imported from China currently carry a 25 percent duty — and even at that rate, they’re often cheaper than what’s available domestically. 

While hoping that more mold making returns to the U.S., Harbour expressed doubts that U.S. shops could fill in the gaps right away if Chinese mold makers are essentially shut out.  

In the meantime, companies that buy molds might be caught in a bind as prices increase. Harbour put forth the scenario of a domestic mold buyer: “If it happens that he tariffs the [China Section] 301 to let’s say 100 percent, now, all of a sudden, it’s not effective for me to buy tools in China anymore. Where do I go? Do I have a list of (alternative domestic) tool makers? Do I know who they are? Because we've lost a lot of them. … So, how do you position that capacity, and is a tool maker ready to take on that capacity?” 

At American Plastic Molding (APM), Adam Auffart, VP of sales and marketing, was weighing what the election might mean for the Scottsburg, Ind., plant, which builds molds and tooling, and molds parts for a wide array of market segments. It's looking to build on annual sales of around $20 million. 

The election results, though, won’t impact how the company, which recently added an IMM and other equipment, proceeds. 

“Our investment plans haven’t really changed,” Auffart said, “but the potential impacts of tariffs have increased the opportunities we are seeing from customers looking to mitigate that impact.” 

He said he’s “navigating the impact tariffs will have on tooling that comes from outside North America. We are cautious with where we launch our tooling without knowing 100 percent [for] sure how the tariffs will be implemented on them.”  

Meanwhile, Paul Harencak, VP of LPS Industries LLC, a Moonachie, N.J. manufacturer of food packaging, said the election results are encouraging. Like other representatives of manufacturing companies, he noted the possibility of continued reshoring.  

He said he believes his company’s prospects are about the same in 2025 as they were in 2024. 

"Our outlook since the election has brightened as we are more confident that the new administration understands the need for USA-based manufacturing and see the benefits to our economy,” he said. 

Ultimately, benefits for processors could mean gains for OEMs, noted Kohei Shinohara, senior VP of Plustech, the IMM division of Sodick.  

"We are hopeful that the new administration’s policies will bring a greater opportunity for reshoring, or increased manufacturing in the U.S. Since Plustech provides the machines that make that manufacturing possible for our customers here, we are eager to learn what that increased demand will look like, and will be ready to provide the machines plus sales and service support for our current and future customers,” he said. 

He also voiced optimism for other policies proposed by the new administration. 

“A lower proposed corporate tax, plus a strong U.S. dollar could provide more opportunity for manufacturing and investment in the U.S., especially for industries like automotive or electronics, and while we are cautiously optimistic what that might look like, we’re here for it.” 

Make way for 2025 

No one economic approach will benefit everyone, Pineda said. It’s one reason why consultant Harbour consistently reminds her clients to really study their markets and supply chains. 

“We really have to be careful in looking at the whole supply chain, if we want to revive U.S. manufacturing, and not just throw a blanket rate across the board, because reviving manufacturing is a long-term goal, right? Well, increasing production is a short-term goal. So then you have to reconcile both durations so the economy is not disrupted,” Pineda said. 

Interviewed before the election, Harbour had some evergreen advice: Stay flexible. 

That should hold true for 2025, as well.  

Harbour said manufacturers have to be prepared to adapt. They should work with trade associations to learn as much as they can, and to lobby the incoming administration to meet their needs. 

“It's really all about planning and agility at this point, you know, that flexibility to be able to sort of bob and weave to these circumstances that come about,” she said.