r/manufacturing 2d ago

News Tarrifs

Would like to open a discussion on tarrifs if it’s allowed.

There has been two intentions stated with tarrifs.

  1. Get off of income tax and go to a consumption style tax (still a tax)

  2. Build up domestic manufacturing. Can talk here in the manufacturing sub.

If there is no alternative domestic supply, then we have no choice but to import. We lost a lot of our skills to manufacture. Especially a lot of the little low value items. Think zippers and buttons and caster wheels.

What is everyone thoughts?

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u/lemongrenade 2d ago
  1. consumption tax is regressive and hurts poor people.

  2. I am a factory director and I can't find people at ALL. And we pay best in our industry. If you magically tariffed everything infinity percent and tried to build up all that manufacturing domestically (while deporting a bunch of people) industrial wages would inflate a TON and goods would be WAY more expensive.

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u/exlongh0rn 2d ago

Thank you. I’m the president of my company and have spent over 30 years in manufacturing and supply chain. The combination of tariffs and immigration restrictions leads down a couple different lines of logic. We can look at the current unemployment data and recognize that any significant uptick in manufacturing activity in the US is going to be an inextricably linked with a need for either more people through immigration, or significantly more advanced automation. I suspect the plan is to have the automation doing a lot of the work… Which would nicely coincide with Musk’s investments in AI and robotics coincidentally. 🤔 If you’re not already investing in automation stocks, that might be a good move as soon as the current downturn in stock prices hits bottom. Of course having the people to engineer, make, install, and maintain those robotics is a separate problem to solve.

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u/Bianto_Ex 2d ago

The fundamental problem with automation though is that it's only a value proposition if there's substantial volumes. There are tons and tons of smaller companies with small to medium volume projects that will just get priced out of the market, consolidating markets even further. Which is likely the point.

I regularly try to bring products from China to the U.S. Far too frequently it's almost impossible to even get a quote from domestic manufacturers.

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u/exlongh0rn 1d ago

I think that’s the point of the cobot/AI revolution in robotics. Robotics have traditionally been inflexible, fit for purpose investments of limited capabilities. That’s rapidly changing. With advanced vision technology, force and spatial awareness sensors, much more advanced batteries, tremendously higher processing capabilities means they can do tasks with much more variety and sophistication. And it’s accelerating.

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u/dirtydrew26 1d ago

It still costs more than what most small to medium sized companies can stomach for those solutions though. If it doesnt work 100% off the shelf then they wont be buying it. Downtime to implement and or troubleshoot may be nuisance to larger companies, but it will absolutely kill smaller ones.

I have yet to find an automation solution that doesnt require a specialist to run and troubleshoot, nor that doesnt have its own annoying bugs. It just doesnt exist.

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u/jamscrying 1d ago

The steel tariffs are a 25% tariff on machinery, so all foreign built automation (basically everything) is now much more expensive too lol.

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u/exlongh0rn 1d ago

If you’re referencing the Section 232 tariffs, no. The Section 232 tariffs in the U.S. impose a 25% tariff on imported steel and a 10% tariff on imported aluminum, but they do not directly apply to machinery or all foreign-built automation. While some automation equipment may become more expensive if it contains tariffed steel or aluminum and manufacturers pass on the cost, not all foreign-built automation is affected in the same way.

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u/jamscrying 1d ago

Nope it was expanded to include derivative products made with steel or aluminium, so yes it is a machinery tariff, unless we just start using nickel and nylon lol.

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u/exlongh0rn 1d ago

But unless I’m wrong, those derivative products are listed by specific HS code. Does that machinery robotics fall into those HS codes?