The Recycler
  • Biuromax Web banner June 2022
  • Katun March Web Advert 2021
  • Static Control June 2022 Masthead Ad

I-ITC discusses Trump impact on aftermarket

I-ITC discusses Trump impact on aftermarket

January 25, 2017

donald_trump_august_19_2015_croppedThe International Imaging Technology Council (I-ITC) believes the new US President is “good news and bad news” for the global aftermarket.

Tricia Judge, the I-ITC’s Executive Director, looked at Trump’s ‘America First’ trade policy and noting his campaign “tapped into the rage of a stifled, unhappy US workforce”. Since election, he has “started to vacillate on campaign promises”, while his tweets “have left many wondering what the future holds. No one can say for sure, probably not even his closest allies”.

Judge reflects on the future for remanufacturers globally, noting that “initial signs point to some good news and bad news” – the good news the withdrawal from the “potential disaster” of the Trans-Pacific Partnership (TTP), a “12 country commitment” that would have been “the world’s largest trade pact”.

As an “unabashed protectionist”, Trump believes the “average US worker has lost jobs and opportunities to countries where labour is cheaper”, including Mexico and China, for whom “he made his disdain […] very clear”. His believed it would “further hurt American workers and undercut US companies”, and Judge noted “he’s got a point”, as the US “has lost entire industries […] to developing countries”.

These include “those that relied on lots of low-skilled workers”, while TTP would have given “more incentive to profit-driven companies to take advantage”, and was “crafted in stealth”, with “very few […] invited to participate in the negotiations”. Another “tragic flaw” was that it “fortified patent rights in favour of their owners”, a matter “nearer to the hearts of the members of the cartridge aftermarket”.

It would have demanded “patent rights be respected at a much higher level than is currently afforded”, and the I-ITC and members have been “lobbying and litigating” against OEMs over patents “for decades”, with “significant victories that have helped erode the chokehold that OEMs have put on cartridge commerce”. The TTP would have given patent holders “rights that have been adjudicated and stripped away”, so the I-ITC “approves of Trump’s decision to look for a better solution […] regardless of his motivation”.

On trade, Judge noted that his protectionism “can be viewed favourably or unfavourably”, as he “has made it clear that he will punish US companies that move jobs to Mexico, or anywhere abroad”. He “wants the US to make jobs, and take them back from the countries to which they have been exported”, as well as “scrutinise the business practices of our trading partners to assure that imported products will be competing with US-made products fairly”.

Trump threatened to place a “tariff on Chinese imports of up to 45 percent”, which could be “a boon for US cartridge remanufacturers, who could indeed benefit from close scrutiny of Chinese-made products”, while tariffs on Chinese cartridges could allow the US industry to “flourish”. However, the “economic reaction” could see Chinese investors “correctly assume that Trump’s policies will deflate” the yuan and inflate the dollar.

This would cause the value of Chinese goods to fall and increase the dollar, so “the tariff’s artificial value proposition is minimised, because Chinese cartridges are far less expensive and far more attractive”, while “US cartridges are too expensive to export, even the remanufactured ones”. An “all-out trade war” could see countries “impose their own tariffs in multiples much higher”, and would “exacerbate the scenario and inflation could soar in the US”.

The global economy could reflect “Mexico’s current real-life situation”, where since the election the peso has “fallen to a record low” due to “fear of coming trade restrictions” and “that ‘wall’ being built”. As a consequence, Mexican goods and holidays “are a real bargain”, with US tourists visiting in “the exact opposite of the scenario Trump seeks”. China is different, with “may other factors that could render a different outcome”, while a tariff could help improve the US market.

Judge notes that ‘America First’ “might still provide some benefits for domestic manufacturers, the workforce and the aftermarket”, but that “we’re in uncharted waters with so many variables: currency fluctuations, patent law shifts in either direction, changes in demand brought on by changes in economies, and even Trump himself adjusts his policies. If the population of the US was caught by surprise on election night, then the global population – and economy – is certainly in for a wild ride during his presidency. Stay tuned.”

Categories : Around the Industry

Tags : Business Remanufacturing USA

  • Aster October 2022 Bog & Bold
  • Ink Tank October 2022 Big & Bold
  • Static Control June 2022 Big & Bold Ad
  • IR Italiana Web ad January 2021
  • October 2022 Big & Bold GPI
  • GM Tech Web ad September 2022
  • Apex Web Ad September 2022
  • Mito Web Ad September 2022
  • PCL Web ad January 2021
  • CTS New Ad March 2022
  • ITP Web ad January 2021
  • HYB Web banner
  • Zhono Web Ad October 2022
  • CET June 2022 Web ad
  • CTS New Ad March 2022
  • HYB Web banner
  • CET June 2022 Web ad
  • Zhono Web Ad October 2022
  • PCL Web ad January 2021
  • ITP Web ad January 2021
  • PCL Web ad January 2021
  • Zhono Web Ad October 2022
  • HYB Web banner
  • CET June 2022 Web ad
  • ITP Web ad January 2021
  • CTS New Ad March 2022

The Recycler, Wittas House, Two Rivers, Station Lane, Witney, OX28 4BH, United Kingdom | Tel: +44 (0) 1993 899800 | Fax : +44 (0) 1993 226899
©2006-2021 The Recycler - Terms & Conditions - Privacy Policy including cookie use

Web design Dorset | Websites by Mark