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Explaining What the Hell is Going On With U.S. Tariffs and Chinese Injection Molds

If the Trump administration does not take the time to understand manufacturing complexities, the trade war won't be "easy to win"

By Rain Noe - January 7, 2019

in Design Business

If you're an industrial designer working with a U.S.-based manufacturer of injection-molded objects, you've perhaps encountered a bit of chaos lately in your manufacturing process. Here's why.

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First off, every industrial designer knows that getting products made can be extraordinarily complicated. Even objects putatively manufactured in the U.S. may be assembled from parts made elsewhere. This is also true of production lines themselves, which may have American factories ejecting parts from injection molds…made in China. Understanding these complexities is, obviously, the first step towards managing them.

There's no doubt that the U.S. runs a trade imbalance with China, and that it is in America's best interests to rectify that. But to accomplish that requires a careful analysis of how things are made, and a structured plan to protect American workers with minimal disruption. That's not possible if you have policymakers who won't read even basic briefings because they prefer to go with their guts.

President Trump famously said that trade wars are "easy to win." He holds that belief because he doesn't understand the complexities of manufacturing. And the result of his oversimplified views has been uncertainty and chaos for manufacturers. What's currently going on with injection molds is a prime example.

In July, the Trump administration imposed a $34 billion round of tariffs on Chinese-made goods. This included Chinese-made injection molds. Sounds good, right? After all, there are U.S.-based manufacturers of injection molds, and they are getting trounced by Chinese moldmakers, who are currently far faster. "U.S. tool shops typically take 18-20 weeks for each tool build," custom injection molder Sajar Plastics wrote to the U.S. Trade Representative, as reported in Plastics News. "Many of the tools we currently have in China are ready to ship within the next four weeks and be in production in the next 10 weeks."

So if we were to slap a 25% tariff on Chinese-made molds, U.S. moldmakers will thrive. U.S. workers win! Easy, right?

Well, not really. The problem is that a lot of U.S. manufacturers--particularly in the auto industry--use Chinese-made injection molds in their American factories, for precisely the reason quoted by Sajar Plastics above. That's why, following the July tariff announcement, the USTR received "a flood of more than 200 requests from plastic injection molding companies, many in the automotive supply chain, to exempt their specific mold imports."

As a result, last week the Trump administration abruptly put a hold on duties for Chinese-made injection molds.

And now U.S.-based moldmakers are unhappy. In July they thought they would be protected, and just six months later, learned they will not be.

It seems like a damned-if-you-do, damned-if-you-don't situation. How is it possible to please both parties? How can the U.S. government correct the trade imbalance and protect the maximum amount of U.S. jobs with the least disruption? What could the Trump administration have done differently?

What's needed here is smart leadership making carefully-planned decisions. We need intelligent people who can study a fiendishly complicated problem, and who will communicate with the relevant industries to learn about the potential repercussions in each direction. They must then craft a well-considered and multifaceted plan--helping American moldmakers boost capacity, for instance, while compensating U.S. manufacturers who rely on Chinese molds--and see to its execution.

The trade war, now begun, cannot be swiftly wound down. The genie is out of the bottle. And it's possible that the U.S. can "win" it. But it won't be easy unless the powers-that-be are in command of the relevant facts first.

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Jeremy Booker

5 years ago

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I have had many tools built in China, and almost every shop in China starts timing from a when a tool design is fully updated with signed approval for cutting steel and goes until 1st shots. Some shops are also very bad about dragging out timing for changes once the mold is placed with them and started. You also have to allow 5-6 weeks for boat shipment, with any slight error in paperwork causing further delay. NA shops typically start timing from PO/Final data with disclaimers for any improper part design issues that cause delays.....and will work very hard with you to minimize those delays. I have only seen a few cases where a China supplier had enough timing advantage to be faster than the NA shop, and that involved using air shipment as an option, wiping out most of the cost savings. We built in China because it's cheaper...period. We also have one (maybe two) shops that we use in China because the quality is actually as good or even better than our NA shops.....which is very sad for me to witness.

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Steve Yang

5 years ago

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you explain very well what actually US Tariffs and Chinese Injection Molds

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Alex Netz

5 years ago

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I think that dismissing legislation because the president “doesn’t understand the complexity of manufacturing” is in itself an oversimplification. I’m Canadian and have no strong opinion on Trump, I think that waves of tarifs he was bringing on was essentialy a form of socialism: collectively us residents would have to pay more for locally produced items at the benefit of those manufacturers.
The n.1 reason why molders like Chinese molds is the price. The delivery times difference mentioned by Sajar are a consequence of the current setup: it would take a few seasons for Us moldmaker to adjust to demand and for molders to establish stronger primary US suppliers, but eventually US mildmakers would be faster (I though shipping by sea from china takes 2 months, no?)
Ultimately, I assume that whomever has a stronger lobby in Washington will come on top

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Brian Cherbak

5 years ago

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I worked on a project in 2018 where we had T0 shots to qualify after 14 days and production pieces less than a week after that. Some catches are: it took being in person to inspect first articles, it's a soft tool only good for 10k shots, a bunch of design compromises were made to not need sliders etc., and it wasn't done in either the US or China.

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Louis Leblanc

5 years ago

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A similar thing is happening in electronics. Tariffs are being applied to the incoming components. Since most components are made in China, US assemblers are actually disadvantaged vs anybody outside of US/China. Moog announced it was considering moving part of their electronics production out of the US. GoPro is looking at moving out of China but US doesn't seem to be on the radar...

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Billy Mack

5 years ago

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Don't forget the 20 weeks of sampling that gets tacked onto the lead-time of Chinese made molds. I'm calling fake news on the 4(14 to sample) week lead-time cited above. Unless Sajar has their own operation in China. Typically, we see US molds (although more expensive) at 10-12 weeks and Chinese molds much, much later.

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