Are Tariffs Quietly Draining Your Profit Margins?
Recent trade policies have introduced significant tariffs on imported goods, affecting various industries, including zinc die casting. For sourcing professionals, failing to account for these rising costs can lead to shrinking margins and unexpected financial strain. As trade policies continue to evolve, the question isn’t whether tariffs will impact your business—it’s how prepared you are to handle them.
Understanding Tariffs and Their Role in Global Trade
Tariffs are taxes imposed by governments on imported goods, affecting the overall cost of products sourced internationally. For sourcing professionals in the manufacturing industry, tariffs play a crucial role in determining total landed costs and can significantly impact the decision to source domestically versus overseas.
Types of Tariffs and Their Impact
Several types of tariffs can influence the cost of zinc die castings:
Ad Valorem Tariffs – Percentage-based tariffs applied to the value of imported goods. For example, a 10% tariff on zinc die castings would add $1,000 in duties to a $10,000 shipment.
Specific Tariffs – Fixed fees imposed per unit, weight, or quantity of goods. A $5 per kilogram tariff on imported zinc components can quickly make overseas sourcing cost-prohibitive.
Anti-Dumping Duties – Levied when foreign manufacturers sell products below market prices to undercut domestic suppliers. The U.S. government often enforces these duties on metal components, including zinc die castings, to protect domestic industries from unfair competition.
Countervailing Duties – Counteract foreign government subsidies that allow overseas manufacturers to sell products at artificially low prices. If foreign zinc die castings benefit from subsidies, countervailing duties can level the playing field for domestic manufacturers.
Section 232 and Section 301 Tariffs – Imposed for national security or trade imbalance reasons. Section 232 tariffs have impacted steel and aluminum, while Section 301 tariffs primarily target imports from specific countries, such as China, due to intellectual property and trade imbalance concerns.
The Current and Future Tariff Landscape
Under the current administration, tariffs have become a cornerstone of U.S. trade policy, with existing and newly proposed tariffs expected to significantly impact sourcing decisions.
Current Tariffs:
Steel and Aluminum Imports: A 25% tariff on steel and aluminum imports was implemented in February 2025, affecting key suppliers such as Canada, Mexico, and Brazil.
Imports from China: Significant tariff hikes on Chinese imports, including a 100% duty on electric vehicles, were confirmed in September 2024 to protect strategic industries.
Proposed Tariffs:
- European Union Goods: On February 26, 2025, President Trump announced plans to impose a 25% tariff on goods imported from the European Union, further expanding the scope of trade barriers.
Given President Trump’s consistent advocacy for protectionist trade policies and recent actions to impose new tariffs, it is reasonable to anticipate that tariff uncertainties will persist throughout his current term. Manufacturers should assume that these trade policies will remain in place and potentially expand, leading to sustained or increased import costs. Therefore, companies are advised to act promptly and consider shifting their sourcing strategies toward domestic suppliers to mitigate the risks associated with ongoing tariff uncertainties.
The Hidden Costs of Importing
Beyond direct tariff costs, sourcing from overseas introduces additional risks and expenses:
Shipping & Logistics – Freight rates, container shortages, and port congestion can add unpredictable costs and delays.
Currency Fluctuations – Exchange rate volatility can impact the final price paid for imported goods.
Quality Control & Compliance – Domestic manufacturers adhere to strict quality standards, while overseas suppliers may vary in consistency and regulatory compliance.
Supply Chain Disruptions – Global events, from pandemics to geopolitical conflicts, can suddenly impact the availability and cost of imports.
Inventory Carrying Costs – Importing large volumes requires businesses to tie up significant cash in inventory, leading to increased storage expenses, higher insurance costs, and reduced capital availability for other investments.
Financial Risk – Longer lead times associated with importing necessitate larger orders to avoid stockouts, increasing the financial burden and risk of excess or obsolete inventory.
Why Domestic Zinc Die Casting Is a Smart Choice
Advancements in automation and robotics have enabled domestic manufacturers like ABCO Diecasters to significantly reduce labor costs, diminishing the traditional cost advantage of sourcing from low-wage countries. Historically, companies turned to China, India, Mexico, and other low-cost regions for manufacturing due to cheaper labor. However, with the widespread adoption of robotics and smart manufacturing processes, the gap in production costs has narrowed, making domestic sourcing more competitive than ever.
By leveraging cutting-edge automation, ABCO Diecasters enhances efficiency, ensures consistent quality, and eliminates many logistical challenges associated with overseas production. Sourcing professionals must recognize that labor costs are no longer the primary driver of sourcing decisions; total cost—including tariffs, logistics, and supply chain stability—should be carefully analyzed when choosing a manufacturing partner.
ABCO Diecasters has been a leader in the industry for over 50 years, consistently thriving despite overseas competition. Many sourcing professionals overlook domestic manufacturers like ABCO, assuming that overseas suppliers offer better pricing without fully analyzing the total cost impact. However, hidden costs such as tariffs, logistics fees, and quality inconsistencies can make offshore sourcing more expensive in the long run.
By sourcing locally with ABCO Diecasters, businesses can ensure a reliable supply chain, consistent product quality, and price predictability. Sourcing professionals need to thoroughly evaluate total costs—including tariffs—which are becoming an increasingly significant factor in cost calculations. Due diligence should include assessing trusted domestic manufacturers like ABCO Diecasters, who offer high-quality, cost-effective solutions without the risks associated with overseas sourcing.