Industrial Automation Equipment Manufacturers May Benefit from Global Trade Dispute

Industrial Automation Equipment Manufacturers May Benefit from Global Trade Dispute

This piece was originally published in the September/October 2019 issue of electroindustry.

Fred Ashton, Economic Analyst, NEMA

The United States is among the top global suppliers of industrial automation equipment, with nearly $13.4 billion worth of exported equipment in 2018. In 2016, the United States was the third-largest global exporter of such equipment after China and Germany, according to the U.S. International Trade Administration (ITA).

The U.S. ITA defines industrial automation equipment as “the hardware and components used to automate factory floors across a wide variety of sectors. This equipment provides manufacturers the bedrock for developing efficient and cutting- edge production systems.” Industrial automation can be divided into four main categories: electric motors and actuators, sensors and instruments, electrical relays and industrial controls, and industrial robots.

Exports of this equipment slid in both 2015 and 2016 but have since rebounded, climbing 6.8 percent and 1.8 percent in 2017 and 2018, respectively. The sector with the largest gain was electric motors and actuators, increasing 4.8 percent to $5.8 billion in 2018.

An industry analyst writing for CNBC1 suggested that the current trade dispute and tariffs on imports could benefit manufacturers of industrial automation equipment. Tariffs raise the cost of inputs for manufacturers. The analyst suggested that manufacturers, needing to lower the costs of production, will turn to automation.

An article published by  Robo Globalechoes this sentiment. While China is the largest global supplier of automation equipment, the author noted that China is lagging in the global export market for advanced technologies. Because of this, the article concludes that the U.S. is “poised to fulfill [the] increase in demand.”

The trade dispute and tariffs have disrupted supply chains and squeezed profit margins. The most likely and cost-effective way for manufacturers to combat these adverse factors is through increased automation, with U.S. manufacturers set to be the global supplier. ei

  1. Brian Gahsman, CNBC, “Robotics, automation will thrive under new trade tariffs,” July 16, 2018
  2. Jeremie Capron, Robo Global, “In today’s trade war, robotics, automation, and AI may be the only winners,” July 13, 2018

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