Tariffs on machine tools for the US will be eliminated, the impact on Japanese companies is limited?

December 11, 2019

Both leaders of Japan and the United States finally reached the conclusion of trade agreement and signed a joint statement on September 26, 2019. Both leaders decided to immediately or gradually eliminate tariffs imposed by the US on exports of some machine tools and cutting tools. The tariffs of 4.2% for machining centers (MC), 4.4% for NC horizontal lathes including turning centers, and 3.5% for laser processing machines will be eliminated in the second year. The tariffs on some cutting tools such as tools for boring and broaching tools will be eliminated in the second year.

According to the Japan Machine Tool Builders’ Association, orders for the US in the first half of 2019 (April to September) were 11.66 billion yen, down 17.6% year-on-year. Orders for the US have been slow down as well as other regions such as Japan, Europe and China. International Manufacturing Technology Show (IMTS) will be held in 2020, when tariffs on MC and NC lathes will be eliminated and it is expected that the order for the US will increase.

However, many of the cautious voices have been heard in the Japanese machine tool industry, “it is a good news, but the competitors of companies are often Japanese builders in the US and the impact is limited. ”

Source: SEISANZAI MARKETING Magazine November 2019 issue