How Global Tariffs Are Changing OEM-Injection Molder Partnerships

    Posted by Ben Harrison on Jul 24, 2019 10:17:00 AM
    Ben Harrison

    Global TariffsThe recent escalation of tariffs on aluminum, steel, and the finished goods that contain those materials has many manufacturers and their customers uncertain about how to continue to go to market. The shifting global political landscape surrounding aluminum and steel tariffs makes ongoing price spikes and supply chain disruption very real possibilities, but there’s no predicting if or when these events will occur.

    What is known is that the tariffs struggle between the United States and China has repercussions for OEMs that rely on injection molding for plastic parts and components. In China, the cost of popular plastics and per-part production increased to accommodate the 25% tariff imposition. This presents its own set of challenges for stateside OEMs, as does the price hike on importing parts or equipment.

    Partnering with a domestic custom injection molder is the most practical step OEMs can take to mitigate tariff-related business risk and financial impact. The reshoring strategy also provides a number of valuable ancillary benefits:

    Accessibility to tooling and tool repair

    The tooling tariffs imposed on China is cause for considerable OEM concern. Having no tools, or tools that tariffs make very expensive, mean goals cannot be met. In the United States, custom injection molders can build strong relationships with domestic tool suppliers and, in some cases, also offer in-house tool repair options to circumvent expense and delays.

    Streamlined communication

    Miscommunication can occur in any language, but working with domestic injection molders virtually removes the need to work across language and cultural barriers that could result in project delays and/or costly rework.

    Compliance and intellectual property protections

    Manufacturing in the United States is often highly regulated within industries. Stateside injection molders are familiar with the required regulatory processes and can readily assist in getting and keeping plastic parts and components in compliance. The same holds true for intellectual property protections. The United States recognizes and enforces trademarks and registrations to safeguard products from counterfeiting. Designs produced internationally aren’t always afforded the same status and markets can be flooded with plagiarized and inferior products — a detriment to product and brand integrity.

    Faster production times

    Transcontinental shipping, customs complications, time zone variances, and other likely delivery delays automatically increase lead times. These inefficiencies are wholly avoidable when working with a domestic custom injection molder.

    Higher quality outcomes

    Keeping product manufacturing domestic provides the consistent oversight, quality control, and molder expertise needed to minimize the prospect of defective products, potential public safety issues, and perhaps damage to the brand. Also, in the rare event a defect occurs, there aren’t the major considerations of time and cost of returning shipments overseas for a fix.

    The tariffs debate is far from over. Waiting for or trying to predict what will happen next puts OEMs in a precarious position. Reshoring injection molding projects is the surest way to mitigate tariff-related costs and business impact, but it can’t be done without a solid strategy for developing partnerships with custom injection molders that have the experience and capabilities to produce plastic parts for applications ranging from common to critical-use. Find out more about the importance of aligning with the right injection molder in our easy-reference guide, How Injection Molder Partnerships Influence Project Costs. Click the button below to access your copy now.

    Project Costs Guide

    Topics: Supply Chain