Washington — The toolmaking sector is mounting a big campaign to convince the Trump administration to bring back 25 percent tariffs on Chinese-made injection molds, saying they're vital to keeping those companies financially strong.
But the mold makers are getting a strong pushback from other domestic manufacturers, like plastics firm Berry Global Inc. and various automotive molders, who say tariff-free Chinese molds are equally important to their own competitiveness.
It sets up a potentially tricky question for the Trump administration, as it seeks to balance the competing impacts from tariffs on different groups of manufacturers, while broadly challenging what it says are China's unfair trade practices.
The administration initially put the mold tariffs in place in July 2018, in the very first round of its trade fight with Beijing. But it quickly backpedaled in the wake of numerous complaints and broadly suspended the duties on molds for one year in December 2018.
Now, as the Trump administration faces a late December decision on whether to reinstate the tariffs, mold makers have flooded the U.S. Trade Representative with comments. Mold makers are much more vocal this year, including hiring a Washington lobbyist.
The American Mold Builders Association filed formal comments to the U.S. Trade Representative Nov. 29 and said it was joined by more than 150 mold making companies also petitioning USTR, like Tri Tech Tooling Inc. in Holland, Mich.
"My company actually experienced an increase in sales when the tariffs were in effect between July and December in 2018," said President Michael Bouma, in a filing. "2018 was our best year ever, which I believe was due to the tariffs."
But Bouma said removing the tariffs cost his firm business.
"As we approach the end of 2019, I will see a 20 percent reduction in sales, which I can trace directly to the loss of work from the automotive industry because the tariffs were lifted on Jan. 1, 2019," he wrote.
Other mold making companies echoed Tri Tech, telling USTR that their capacity utilization dropped after the tariffs were removed.
Some said they were operating in the range of 60 percent capacity, with headcount down, employees working less than 40 hours a week and hiring and investment off.
They said business rose during the six months of tariffs — one company told USTR that on the first day of the tariffs in mid-2018, it "began receiving calls from customers I had not heard from in years asking to regain a relationship" — but then when the tariffs were lifted six months later, those calls dried up.
Overall, AMBA said, mold making capacity utilization is at 75 percent, which it said means "American companies [are] in a strong position to meet current and future domestic demands."
AMBA said capacity utilization rose from 77 percent to 81 percent the short time the tariffs were in place last year, falling back after the tariffs were suspended.
It argued that U.S. mold makers can match China's delivery times while exceeding quality and said U.S. molds are critical to national and economic security.
"We believe the sheer number of mold manufacturing establishments in the U.S. clearly counters any arguments made by those requesting an exclusion extension that no domestic alternative to Chinese mold imports exist," wrote Kym Conis, managing director with the AMBA.
The U.S. mold making sector has about $500 million worth of unused capacity, out of total sales of $6.4 billion, among its 1,439 companies, AMBA said. The sector employs 35,000 people with an average annual salary of $56,203, it said.