Heat Treat Today publishes twelve print magazines annually and included in each is a letter from the publisher, Doug Glenn. This letter is from the June 2025 Buyers Guide print edition.
Feel free to contact Doug at doug@heattreattoday.com if you have a question or comment.
The Age of Tariffs
In 2025, procuring nearly anything has become a bit more “interesting,” shall we say, with the complete and total shake up of the world’s economy with hasty and heavy tariffs imposed by the U.S. on the rest of the world.
For posterity, let me record a few basic facts about what is happening. On April 2, 2025, newly re-elected U.S. President, Donald J. Trump, imposed what was described as “reciprocal tariffs” on nearly every country in the world. April 2 was chosen because President Trump did not want people to think that he was just kidding by imposing the tariffs on April 1, April Fools’ Day. All previous trade agreements were instantly and unilaterally eliminated.
The tariffs were, in fact, not truly reciprocal as one might simply understand that word. Instead, each nation’s actual tariffs were combined with their trade deficit and currency manipulation and then divided in half to arrive at what President Trump called “U.S.A. Discounted Reciprocal Tariffs.” No country escaped. Everyone had at least a 10% tariff. China was hit with a 34% reciprocal tariff – their calculated tariff was 67%. India received a 26% reciprocal tariff – their calculated tariff was 52%.
Roughly a week later, while the world was still reeling, all tariffs were reduced to 10% assuming the country did not retaliate. Only one country retaliated – China. China’s tariffs have ranged as high as 145% and as low as 30% as the two countries struggle to come to an agreement. It is safe to describe the relationship between the two countries as very tense.
Understanding Tariffs
Before exploring how these tariffs might impact the North America heat treating and thermal processing markets, let me first make two recommendations for anyone wanting to learn more about tariffs and good, sound economics.
- The best book I’ve ever read about tariffs is an old classic book written by Frederic Bastiat entitled, Economic Sophisms. The book is spot on and simple and shows how tariffs are not generally helpful from an economic perspective. Bastiat was also the author of another great, short book called The Law. I recommend both.
- Another excellent book that discusses tariffs is Henry Hazlitt’s Economics in One Lesson, especially chapter eleven, “Who’s ‘Protected’ by Tariffs.”
Of course, economics aren’t the only reason a country imposes tariffs. Preserving industries critical to national defense is one such non-economic reason often cited for imposing tariffs.
The Upside of Tariffs
So, what are the potential impacts of tariffs on the North American thermal processing industry? Given that tariffs are, in essence, a tax, there are few true economic gains to be made. However, it is very possible that our commercial heat treater brothers and sisters may benefit significantly from tariffs, especially if more and more manufacturing returns to the U.S. This return of manufacturing would also potentially benefit many oven, furnace, and induction equipment manufacturers, as well as component suppliers. Any increase in manufacturing State-side will bode well for industry suppliers.
The Downside of Tariffs
The potential downsides are legion. The most notable? Instead of stimulating manufacturing in the U.S., it is possible that tariffs will start to significantly impact exports. If that happens, manufacturing will take it on the chin due to artificially restricted demand. Not only would this hurt many of the companies that read this publication and perform their own in-house thermal processing, but it will have the trickle-down effect of drying up demand for new furnaces, ovens, and components.
Tariffs also could be a real boon for furnace and oven manufacturers located within the borders of the U.S. Assuming the tariffs persist (which is doubtful), companies building furnaces in the U.S. will have a significant competitive advantage. However, the opposite is true for furnace manufacturers who build internationally and ship their equipment into the U.S. Currently, there are a significant number of international furnace manufacturers doing business in the U.S. These companies are at risk.
The Real Goal of Trump’s Tariffs
If the real goal of Trump’s tariffs is to lower all tariffs everywhere, this whole tariff chapter should end well, ultimately. If, however, President Trump really does “loooove tariffs” as he has claimed, the new Golden Age will not be as golden as it might have been.
Publisher
Heat Treat Today
For more information: Contact Doug at doug@heattreattoday.com
