Tariffs on injection molds

US LIFTS TARIFFS ON CHINA-MADE INJECTION MOLDS

The Donald Trump administration unexpectedly put a hold on steep 25% tariffs on injection moulds imported from China in late December, a decision that industry observers say is likely to hurt American mould building companies but help US plastics processors.

The announcement from the US Trade Representative means that the 25% tariffs on injection moulds — imposed in July as part of the first round of $34 billion (€30 billion) in duties on Chinese imports — will be suspended for at least one year.

USTR did not explain its decision, but one attorney for the mould making industry said it may be a response to a flood of more than 200 requests from plastic injection moulding companies, many in the automotive supply chain, to exempt their specific mould imports.

The USTR announcement is broader than moulds, exempting about 30 different categories of imports from the tariffs. Moulds are the largest plastics-related category.

 "I believe they have had so many requests from companies seeking  exemptions of moulds from the tariff, that the government decided to exclude moulds in their entirety rather than spending resources on each individual exemption request for a mould," said H. Alan Rothenbuecher, a lawyer for the Indianapolis-based American Mold Builders Association. "No one knows for sure why, but that is my opinion."

Rothenbuecher, a partner with the Cleveland-based law firm Benesch, Friedlander, Coplan & Aronoff LLP, said the ruling will hurt US mould builders but help US plastics processors who buy moulds.

"There was and is strong support among the [US] mould builder community for these tariffs," Rothenbuecher wrote in an email.

Plastics processors, however, said the higher costs from the 25% tariffs would be hard for them to absorb, causing significant problems in their already price-sensitive businesses.

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.

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.