A series of tariffs on imports from Canada, Mexico and China have left many American manufacturers scrambling as they examine the best way to modify their supply chains.
While the Trump administration's plans to impose an additional 25% on imports from Canada and Mexico have been paused for 30 days, an additional 10% on imports from China already went into effect.
To help companies decide whether now is the time to start reshoring operations, Port Washington-based
Molded Dimensions Group recently launched a
Reshore Success Program.
Molded Dimensions Group is a manufacturer and supplier of custom rubber and urethane molded parts to original equipment manufacturers.
"Companies are coming to us and they're looking at all options,” said
Braden Schrock, general manager of Molded Dimensions Group’s Port Washington facility. “They're looking at reshoring to the United States, but they're also looking at moving out of a country like China to a lower tariff cost country like India. We're also seeing people talk about Mexico.”
Molded Dimensions Group's reshoring services are unique because the company specializes in sourcing custom components that are made at a lower volume. This is different from a logistics company that deals with high-volume parts pulled right off the shelf.
"A part could be made at dozens of suppliers, potentially,” said Schrock. “(For logistics companies,) it's just a matter of finding the cheapest price, the shortest week time.”
If a company currently makes a part overseas, Molded Dimensions Group looks at the material they're using, the manufacturing process, the quality requirements of the part, and the manufacturer's desired volume. Molded Dimensions Group will then provide an opinion on if that specific part could be successfully made in the U.S.
Molded Dimensions Group also has a higher level of technical expertise compared to its competitors, Schrock explained. This allows the company to look, on a part-by-part basis, at drawings and models to decide what might be good or bad about reshoring a particular component.
“You'll have something to go off of, instead of making a decision in a vacuum, because if you make it purely a financial decision, then you would never be sure of anything,” said Schrock.
While many manufacturers diversified their supply chains during the COVID-19 pandemic, some were not able to. Other companies shifted portions of their work back overseas as they expanded their product portfolio, and the pandemic subsided.
"They are having that pain point of paying more in tariffs now and having less control of their supply chain because they're overseas,” said Schrock. “We don't know what's happening in the next three months, and there's certainly fear and uncertainty.”
Manufacturers making plastic and urethane components will find the cost of making those parts in the United States is comparable to what they pay now, Schrock said. The biggest financial investment would be recreating any custom molds used to make those parts here in the U.S.
While the upfront cost of reshoring could lead to some hesitancy, no longer having to navigate the uncertainty of the United States’ relationship with foreign countries – and the ongoing trend of decoupling from China – is a big enough benefit for many manufacturers to make the jump.
“I don't have any special insight as to what's going to happen,” said Schrock. “I think that's the exact issue, right? It's pretty uncertain.”
