Molders, mold makers expect tariff hit but unsure of what effects will be

While plastics processors and mold builders anticipate global tariffs imposed by President Donald Trump's administration, some are optimistic about the potential impacts on their business despite continued high costs of doing business from inflation, labor shortages and competition with China.

"Right now, those impacts change seemingly every week, every time a new tariff is announced," Laurie Harbour, principal at consulting firm Wipfli, told Plastics News in an interview.

In Wipfli's 2025 Manufacturing Pulse Study, which was taken before 25 percent tariffs on Mexico and Canada as well as wider levies around the globe were announced, 61 percent of the study's 300 respondents said the tariffs have or would have an impact on business.

Although some companies are "insulated" from the effects of tariffs, "they're going to affect everybody," Harbour said. "There's good and bad that will come from [some tariffs.]"

Of the plastics processors surveyed by Wipfli, 56 percent said they expect tariffs to impact business, 11 percent said they had already been hit, and 33 percent said they saw no change.

Companies that don't purchase anything outside of the U.S., such as some injection mold tool and die builders, "[will] be able to buy everything without an extra cost," she said. "Some will also see a positive effect of reshoring of product into the market. … There might be more work to do here in the U.S."

Those effects will "break down differently" based on a company's market and the countries they normally do business with, Harbour said.

U.S. companies responded more optimistically about profit increases than respondents in other countries, Wipfli's study summary said.

"Manufacturers in the U.S. that largely compete with Canada, Mexico or LCCs [low-cost countries] are predicting higher levels of demand for U.S.-manufactured parts, especially within consumer products, aerospace and appliance."

From 2023 to 2024, quote activity was slightly increased in some industries including lighting and electrical, defense, and material handling. Consumer markets such as lawn and garden, and sports and recreation, are seeing lower quote levels.

Companies are "expecting a much greater utilization of their capacity," Harbour said. "Molders, for example, are hoping to increase by nearly 10 points of utilization in the given year. That means they've got orders and they've got new projects, ones that maybe are not hitting until later in the year."

"Some of the largest markets are on the right side here," she said. "The aerospace industry is rebuilding their supply of planes, and recovering from COVID, [with] lots of new plane orders … there is quite a bit of quote activity happening in in a lot of markets.

"Automotive falls way down the list," Harbour said, "because the average consumer that purchases those is feeling a pinch financially."

Despite that pinch, companies across nearly all process types are "relatively optimistic" about profits in 2025, the study said, with 55 percent of respondents forecasting higher profits compared to 2024.

Most companies, Harbour said, "tend to start the year out … positive. Then as they start to get into the first quarter and they see their revenues, they start to get a little calmer."

Wipfli's quarterly studies have also shown that "manufacturer's positivity tends to fall throughout each year after an optimistic start," the summary said.

This quarter, manufacturers' optimism is "compounded" by some feeling positively about the new presidential administration, it said. "Wipfli encourages manufacturers to be realistic about their 2025 forecasts and make data-backed business decisions in these constantly changing times."

"Revenue in the first quarter has been down for many companies, but not everyone," Harbour said. "There are pockets of [markets] doing very well. But there is a sentiment among many companies that things are still soft, and they've not returned to the levels they'd hope to see."

"We're seeing volumes down anywhere between 5 and 20 percent off of normal," she said. "And across industries. Even medical is down."

"Some industries will be impacted more than others," Harbour said. "Obviously … automotive sales will likely go down this year. If we were forecasting over 16 million units, I don't think we'll sell over 15 million units. I think it [could] potentially even be lower than that. Part of that is just because [manufacturers] can't pick up and move [production] that fast."

The cost of automotive tariffs will be spread across all vehicle sales, she said, adding that "just makes it harder for the average consumer to purchase [a car.]"

Consumer products such as phones and computers that are manufactured in China or Indonesia will also go up in price.

Aerospace, medical and industrial equipment will be "big focuses" for plastics processors and mold builders in 2025, Harbour said.

On average, manufacturers expect a 2.7 percent sales increase from 2024 to 2025, the study said. Although that report is positive, material cost increases and labor cost increases "are likely to continue" in 2025. "It's not likely that all manufacturers forecasting higher profit will achieve it," it added.

Companies are "feeling positive about the full balance of the year," Harbour said. "As an analyst, I believe the back half of the year will see more growth in volume. In most markets, inventory levels have been significantly decreased."

Manufacturers in medical and other markets saw slower business last year as their customers burned off their inventory levels, she said. "I believe orders will start to increase in the third and the fourth quarter [of 2025.]"

As the status of tariffs and trade "change every week," companies are "unsure" and "careful" about sharing the challenges of adapting their businesses.

"I don't think everybody anticipated the amount of retaliatory tariffs," Harbour said. Some of Wipfli's clients "had no idea [Trump] would tariff Indonesia."

The general feeling Harbour gets from her clients is "uncertainty," she said. "Not all tariffs are bad, but a lot of these are going to have an impact on the cost of goods for the consumer."

Although some manufacturers are winning work back that was previously lost to China, "they don't want to talk about it," Harbour said.

"I think there's a little bit of fear in what happens if you talk too much about what you're winning and losing … it's a new world, and we have to figure out how to maneuver around it as business owners,"she said.