The U.S. plastics tooling sector should benefit from lower steel and aluminum prices, but experts are taking a wait-and-see attitude on the impact of lifting tariffs on steel and aluminum from Canada and Mexico.
Dropping the tariffs removes a major hurdle to passage of the U.S.-Mexico-Canada Agreement trade deal by all three countries.
A year ago, President Trump's administration slapped tariffs of 25 percent for steel and 10 percent for aluminum imported into the U.S. Trump announced the rollback of the duties during a May 17 speech to the National Association of Realtors.
Removing the tariffs "was the right thing to do," said consultant Laurie Harbour, president and CEO of Harbour Results Inc. in Southfield, Mich.
Harbour said it's a good thing for mold makers, but she is not convinced metals prices will come down. One factor is that U.S. tariffs remain in place for steel and aluminum from Europe.
"I don't think it's going to lower steel prices because steel prices were inflated artificially," Harbour said. "There's a lot of steel that the Canadians buy out of the U.S., and there's some steel that the U.S. buys out of Canada."
Mold makers are watching the news, but global trade tensions are complex and can be hard to figure out, said Mike Skukalek, chief financial officer for Krieger Craftsmen Inc. of Grand Rapids, Mich. He buys steel for the company.
"Everything changes so fast. The uncertainty over it may or may not happen, and how quickly that can change today," he said.
Stan Glover, director of technical sales at screw and component maker Zeiger Industries Inc. in Canton, Ohio, has a background in the steel industry.
"I think it does mean something for the mold makers. It's good news for the American and the Canadian market," Glover said. Canada is a significant supplier of mold steel, he said.
Glover said prices for mold steel "should stabilize and start to decline some," after the tariffs come off.
Plastics industry trade groups praised the removal of the Section 232 tariffs for fostering the new free trade agreement.
"Mexico and Canada are our nation's biggest trading partners. The U.S. plastics industry applauds the Trump administration for recognizing the importance of these relationships and for eliminating a roadblock that might've jeopardized the passage of the U.S.-Mexico-Canada Agreement," said Patty Long, interim president and CEO of the Plastics Industry Association.
"The USMCA is an important accord that will support American businesses and create jobs, and we hope the alleviation of these steel and aluminum tariffs serves as stepping stone toward its enactment," Long said.
The American Chemistry Council also said noted that Canada has announced the country is dropping its retaliatory tariffs, including those on $2.5 billion in U.S.-made chemical exports. Removing the steel tariffs also will reduce the cost of building chemical manufacturing facilities, ACC said.