Where are we in the tariffs tug-of-war?
It feels like we’ve been talking about tariffs for months now, with the constant, will they or won’t they take effect? Josh Cosford penned an opinion piece a few weeks ago on this very topic, sharing his thoughts from north of our border as we waited for impending tariffs.
Since he wrote that, some tariffs have gone into effect. But just how is the U.S. fluid power industry handling this sudden increase on materials they need or on the components they sell? Like the tug-of-war uncertainty, the answer seems to also be a waffling “it depends.”
Last year, economists studying the fluid power market indicated we were coming out of our 2024 recession and things would stabilize and grow. But tariffs have disrupted the market and we’re in a very much wait-and-see mode.
In a recent survey of members, the National Fluid Power Association asked how much impact the tariffs were having on their business. Interestingly enough, the biggest impact came in the mobile hydraulics market, said Pete Alles, VP of Member Services and Operations for the NFPA. Anecdotally, I have also found this true in my conversations with fluid power manufacturers. Those whose business are more in the industrial space —whether it’s oil and gas or industrial automation and manufacturing —have said that tariffs have not caused as much concern for them as others.
When you speak with fluid power manufacturers and distributors to learn if they are increasing prices or passing the cost of tariffs onto their customers, the answer is again, often, “it depends.” Distributors seem to be feeling the pressure less than manufacturers, according to the NFPA’s survey, with manufacturers and suppliers being almost even in reporting a negative impact.
I’ve spoken with companies and received emails about their reaction to the tariffs. Some are not making any price increases currently. Those that are passing the tariff costs on, usually are putting a line-item fee on their invoices.
While we expect Chinese imports to take a big hit, what fluid power manufacturers have indicated is that there is greater concern about European tariffs, which makes sense as many European manufacturers have U.S. manufacturing, assembly and distribution.
As noted, mobile hydraulics seems to be bearing the brunt of the tariff concern. NFPA’s latest data shows a 20% drop in mobile hydraulic shipments compared to last year, with orders trending even lower. Conversely, pneumatics and industrial hydraulics shipments are holding steady or even showing signs of growth.
While we wait and see how these changing tariffs will impact the industry, I do expect to see more reshoring and near-shoring in the future. While more manufacturers continue to build plants in Mexico, China’s numbers have stabilized and even declined. Alles said more European companies have explored NFPA membership. As American fluid power companies increase stateside production, perhaps we’ll see more international companies explore production here in the future.
It’s an optimistic viewpoint and one I like to hold onto — I try to be a glass half-full kind of person. As I’ve heard for years at various NFPA, FPDA and NAHAD conferences, the U.S. is not immune to volatility, but as the biggest economy in the world, we still have an attractive manufacturing base.
The tariffs may change again today, tomorrow, and next week. As I write this, the Trump administration is saying they’re about to announce a trade deal with China. But we will wait. We will keep adapting to the changes that may come and continue to power the machinery that makes the world go around.
Mary C. Gannon • Editor-in-Chief
[email protected]
linkedin.com/in/marygannonramsak
Filed Under: Digital Issues
