U.S.-China Trade War and COVID-19 Impact on U.S. Machine Tool Market
Market News

U.S.-China Trade War and COVID-19 Impact on U.S. Machine Tool Market

Are U.S.-China Trade War and COVID-19 influence business opportunities in the United States? The United States is the second-largest consumer of machine tools in the world, the industrial market is still waiting, and global economic demand has not significantly recovered.
Published: Mar 25, 2020
U.S.-China Trade War and COVID-19 Impact on U.S. Machine Tool Market

Although the US and China have signed the first phase of the trade agreement, the market is still waiting to see the atmosphere, and global economic demand has not yet clearly recovered. According to the economic growth data currently released by the US Department of Commerce's Economic Analysis Bureau (BEA), US private consumption is still the locomotive of the economy in the third quarter of 2019, reaching a growth rate of 2.6%. Compared with private consumption, the growth rate of private investment is the lowest since President Trump ’s tenure, only 0.4%. Besides, exports are flat, so weakening investment is the main reason hindering US economic growth. According to the important reference value of the United States PMI index (the latest data in January 51.9), the recent trend due to slowing exports, indicating that the manufacturing boom has slowed after rising for three consecutive months. Affected by the China epidemic at the beginning of this year, the global manufacturing supply chain has begun to the crisis, especially automotive components and 3C products, which will also affect the layout and strategy of the machine tool industry outside the China market and respond to the end application market Road.

Recent Situation of Major Importers of U.S. Machine Tools

According to a report by Gardner Research, the United States is the world's second-largest consumer of machine tools, and previous research by the Obstetrics International Institute also shows that the consumption of machine tools in the United States has gradually increased the proportion of domestic demand for domestic manufacturing supply, thereby reducing the proportion of domestic demand from Japan, Germany, and the proportion of imported machines from Switzerland and Italy. In addition to products manufactured in the United States by domestic manufacturers, there are also foreign-funded enterprises from the original developed countries to set up factories in the United States to provide products and after-sales services. As of 2018, 65% of the U.S. machine tool consumption ratio still depends on imports.

The total amount of machine tools imported by the United States in 2019 was 5.96 billion U.S. dollars, a decrease of 4.1% compared with 6.21 billion U.S. dollars in 2018. The main importing countries were Japan, Germany, Italy, South Korea, and Taiwan. The market share is 31%, 17%, 8%, 8%, 7%.

Compared with the import amount of machine tools in the United States in recent years (2015 ~ 2019), the following points hope you will give attention:

U.S.-China trade war influences China's machine tool exports to the U.S. decreased by 31.5% in 2019.

Due to the impact of the trade war tariffs, China's machine tools exported to the United States in 2019 reduced by more than 100 million U.S. dollars compared to 2018. Among them, the models with the most declining growth rate are lathes and comprehensive processing machines, and the models with the most reduced amounts are laser Processing and stamping machines.

This also means that before the current phase one trade agreement is signed and before the next consensus is reached, the above-mentioned models that have already imposed 25% tariffs on the first wave of 34 billion tariff lists in May 2019. Due to the cost increase, China's market share in the United States will continue to be divided by other countries.

German imports in the U.S. market have fallen, VDW said that the German export market has performed poorly in 2019, China (-13%) and the United States (-15%), showed double-digit declines, while Europe accounted for more than half of Germany's exports, a decrease of 5% compared to last year. In other words, the key to maintaining high production in Germany in 2019 is the domestic market. VDW is not optimistic about the situation of the German machine tool industry in the next two years, because of the continued downturn of the global economy, the fluctuation of the automotive industry, the turbulence of trade strategies and the recent outbreak of new coronaviruses.

U.S. manufacturing industry current situation and machine tool manufacturers market strategy

The entire year of last year was affected by the US-China trade war, which led to downturn investment activities, coupled with the sluggish global economic recovery, resulting in shrinking consumer demand, which severely hit the US manufacturing market. And the main application market of machine tools also frequently heard some news: such as the end of 2019 Boeing 737 MAX passenger planes ceased production and grounding, auto industry closures and strikes. However, according to Mark lines statistics, although car sales in 2019 are 1.3% lower than in 2018, current sales are still more than 17 million, and the sales amount is also higher than in 2018, which represents an increase in the unit price of light vehicles in the United States. In the next 2020, we must pay attention to the follow-up impact of the US-Mexico-Canada Trade Agreement (USMCA), that is, the proportion of automobile and truck components manufactured in North America will increase from 62.5% to 75% of NAFTA, and North American aluminum steel needs to be used. Besides, 40% to 45% of vehicle components must be manufactured by workers with wages of more than $ 16/an hour (the US and Canada). Some vehicles assembled in Mexico mainly use components besides Mexico and North America, and may not be eligible for US duty-free access. To sum up, it can be known that in the future, the American automobile industry will gradually move towards higher value (high prices) to compensate for rising manufacturing costs. The dynamics of manufacturers are mainly strategic that partners and mergers and acquisitions in the US market in 2019.

U.S. manufacturing will move towards automation and high value

Affected by the slowdown of global economic development, the development of the US manufacturing industry is slowing down, which will cause the demand growth rate of the US machine tool market to slow down in the future, which will affect the world ’s major machine tool producers exports to the United States. There will be a reduction. At this time, American manufacturing manufacturers tend to be conservative in equipment investment. Therefore, manufacturing manufacturers are only more willing to purchase old machines that they are familiar with or install new equipment to upgrade old machines. In this way, the purchase of manufacturers can be reduced Equipment costs. Therefore, the American metal processing manufacturers will consider the MTBF (Mean Time Between Failure) and single-machine automation capabilities of the machine when purchasing machine tools.

Published by Mar 25, 2020 Source :maonline

Further reading

You might also be interested in ...

Headline
Market News
Smart Milling Machines, IoT, and High-Speed Milling
Technological advancements in the machine tools industry are constantly shaping the way manufacturers approach production. The integration of Smart Milling Machines with the Internet of Things (IoT), often referred to as Industry 4.0, propels the industry toward unprecedented levels of efficiency and productivity.
Headline
Market News
CNC Milling AI Technology and Nano-Machining
Advancements in Computer Numerical Control (CNC) milling technology have propelled CNC milling machines into a new era of precision, speed, and efficiency. Nano-machining allows the fabrication of components and structures with dimensions on the nanometer scale, typically ranging from 1 to 100 nanometers. These technological advancements, combined with the integration of artificial intelligence (AI) and automation, have had a profound impact across manufacturing industries.
Headline
Market News
Innovations in Grinding Wheel Technology: Materials, Design and 3D Additive Manufacturing
From the rudimentary stones used in ancient times to the highly sophisticated wheels of today, the evolution of grinding wheel materials and design has been marked by a relentless pursuit of precision and efficiency. Early grinding wheels were often made from natural abrasives like sandstone. Today, materials such as aluminum oxide and silicon carbide, along with advancements in design and the introduction of additive manufacturing, have revolutionized the grinding process.
Headline
Market News
Environmental Sustainability in Grinding Operations
Grinding operations have significant environmental impacts, contributing to carbon emissions and resource depletion. The manufacturing industry is transforming for sustainability, with grinding machines adopting eco-friendly practices and pursuing green certifications to enhance their role in sustainable manufacturing.
Headline
Market News
The Evolution of Advanced Precision Grinding Machine Technologies
The evolution of precision grinding machines has been nothing short of revolutionary. With the integration of cutting-edge technologies, the sector has witnessed remarkable advancements, including the incorporation of Artificial Intelligence (AI), automation, and Industry 4.0. The latest innovations in grinding machine technology include the seamless integration of AI and automation, advanced control systems, as well as the profound impact of Industry 4.0 on grinding processes, driving higher efficiency, precision, and adaptability.
Headline
Market News
EDM in the Era of Industry 4.0: Challenges and Solutions
The integration of Electrical Discharge Machining (EDM) into Industry 4.0 marks a new era of smart manufacturing, where interconnected technologies, data-driven processes, and automation play pivotal roles. Incorporating EDM into the broader framework of Industry 4.0 has brought forth many new challenges, ranging from cybersecurity concerns to interoperability issues and the optimization potential of data analytics. These challenges have spurred the discovery of unique solutions to address them.
Headline
Market News
The Rise of Solid-State Drives: Accelerating the Future of Data Storage
As the demand for faster, more efficient, and reliable data storage solutions continues to increase at incredible rates, Solid State Drives (SSDs) have brought about a monumental leap forward from traditional Hard Disk Drives (HDDs). Known for their robust performance, durability, and efficiency, SSDs have quickly become the preferred storage solution over traditional HDDs.
Headline
Market News
Optical Switches: Revolutionizing Data Transmission
Optical switches are devices used in optical fiber communication networks to selectively switch or route light signals from one optical fiber to another without converting the optical signal to an electrical signal. They are used in optical communication networks, data centers, and other industries where efficient signal routing and switching are paramount.
Headline
Market News
Lighting the Way: The Rise of Solar Powered LED Lights
Solar Powered LED Lights merge the low power requirements of LED technology with the renewable energy capabilities of solar power, offering an eco-friendly solution for diverse lighting needs across various settings. From emergency response and relief efforts to captivating art exhibits, creative minds are continually discovering new and innovative uses for this transformative technology.
Headline
Market News
Maximizing Connectivity: USB-C to HDMI+VGA+Audio Splitters
With the ever-increasing complexity of electronic devices such as smartphones, laptops, and PCs, there has been a corresponding need for versatile and efficient ways to transmit the ever-increasing data and multimedia. To meet these rising data transfer needs and enhance digital connectivity, various forms of connectors have been designed.
Headline
Market News
The Art of Bicycle Manufacturing: Blending Tradition with Innovation
From traditional craftsmanship to modern production techniques, bicycle manufacturing represents a blend of artistry, precision engineering, and technological innovation. The contrast between traditional and modern techniques can significantly affect the final product’s quality, performance, appeal, and brand loyalty. Quality control and testing protocols, along with collaborative efforts that drive innovation, and the enduring value of craftsmanship, significantly influence the art of bike building.
Headline
Market News
USB “Fast Charge” Car Chargers: Evolution and Technology
Staying connected in today’s digital world is no longer a luxury—it's a necessity. Reliable and continuous use of smartphones and other portable electronics would not be possible without the constant connectivity offered by portable USB chargers. One very important category of USB chargers is those used in cars, which convert the car's 12V electrical supply into a USB-compatible electric output suitable for consumer electronics. This has led to a robust market for USB car chargers, highlighting the unique applications and benefits of these types of chargers.
Agree