Big news to report for manufacturers: the additional 25% tariff on injection molds from China has been suspended.
While good news, this surprise announcement from the US Trade Representative is causing a lot of confusion for manufacturers who buy injection molds, both offshore and domestically.
And we’ve got some myth-busting facts to help you get to the truth so you can make the best decisions for your business.
Below are the top 3 myths that keep showing up in our inboxes, social media feeds, and conversations with manufacturers.
Myth #1: The tariffs are gone for good
The 25% additional tariff on offshore injection molds has been lifted. This reduces the tariff on injection molds from China to 3.1%, the same level it was before the tariff hike on July 6, 2018.
But is the tariff gone for good?
While we’d like say the tariff increase is gone for good, the language from the US Trade Representative leaves no doubt it could return.
The tariffs are merely suspended for one year.
Because Jade is a US company which owns a tooling factory in China, we’ve been able to keep prices low for our customers the past six months to offset the tariff hike and keep supply chains moving.
With the tariff now suspended, these customers will enjoy even more savings. And if it comes back in a year, they already have a reliable source to remain cost-neutral.
Myth #2: Manufacturers are entitled to rebates
The announcement that the tariff suspension is retroactive leads many people to assume rebates are in order for molds imported between July 6, 2018 and December 28, 2018.
As of this writing, there are no details on a rebate process or indications one is forthcoming.
Here at Jade, we’ll continue monitoring the situation with the help of our tariff attorney. If the government gives us a way to recoup that money, we’ll help our customers do that.
Until then, consider this a myth.
Myth #3: The tariff suspension is bad news for US mold makers
Now that manufacturers, product designers, and distributors don’t get unduly penalized for buying quality injection molds from China, some people worry this will hurt US mold makers.
You can put those fears to rest. US mold makers are currently over capacity.
You might be surprised to learn many have resorted to getting tooling done in China because they can’t meet the demand domestically.
(Some experts claim this is the real reason the tariff was suspended, rather than objections by automakers.)
US mold makers simply aren’t equipped to handle the volume of injection mold needs in the US or the timeline most customers demand—that was true even before the tariff hike.
A US mold maker may take 18-20 weeks per tool build, whereas our Jade factory can be ready to ship in about 6 weeks.
This should clear up the biggest myths surrounding the tariff suspension. However, you might have additional questions.
Or perhaps you want to talk about how offshore tooling with US engineering oversight can increase your productivity and revenue?
Click here to book a call at your convenience, or phone directly at 1-800-USE-JADE and we’ll help you sort through fact and fiction when it comes to buying quality injection molds from China.