MT Magazine September/October 2025

THE INTERNATIONAL ISSUE

MANUFACTURING MATTERS

10

Manufacturers Navigate New Trade Rules Manufacturers in the United States and abroad continue to grapple with the effects of President Donald Trump’s tariffs on imported products, components, and raw materials. Frequent changes in tariff rules and enforcement have made it difficult for companies to adapt and invest with confidence. Industry leaders hope that, once the policy environment stabilizes and more trade agreements are in place, the federal government will establish a clear, consistent process for seeking critical tariff exclusions – particularly for industries and companies whose products are essential to national security. Such a framework would help safeguard key manufacturing capabilities while enabling businesses to remain competitive in the global market. Tax provisions in the One Big Beautiful Bill Act – such as permanent 100% bonus depreciation, expanded Section 179 expensing, and permanent R&D expensing – can help reduce costs for equipment purchases and research investments, providing some relief from uncertainty. ADVOCACY

INTELLIGENCE

Reconciling Manufacturing Technology Trade With Broader Trends While the Bureau of Economic Analysis’ Balance of Payments data for the second quarter of 2025 shows a notable decline in total U.S. net imports, trade data for machine tools and cutting tools tells a different story. Net imports for both categories increased significantly – by over $76 million for cutting tools and $56 million for machine tools compared to the first quarter. This divergence reflects the longer planning cycles and strategic nature of capital equipment purchases. Unlike consumer goods, which respond quickly to economic signals or trade shifts, machine tools are typically ordered well in advance and integrated into broader investment timelines. As of this writing, net imports of machine tools and cutting tools are projected to begin tracking more closely with broader trade trends as supply chains adjust and purchasing patterns normalize across sectors. This convergence would bring capital goods trade more in line with the overall import landscape reflected in the BEA’s data.