What Manufacturers Should Know About Tariffs

In March 2018, the United States imposed tariffs and quotas on imports of specific steel and aluminum products from all countries with the exception of Australia.  Recently, the United States also imposed tariffs on a sizeable portion of imports from China. The Trump Administration created a list of $300 billion dollars worth of Chinese imports, with some with tariffs up to 25%. These tariffs have had an impact on United States producers and consumers as a consequence. There are many different outcomes in the trade war with China, we will look at the short term, long term, and immediate effects of the trade war.


What is a Tariff?

Tariffs add a cost to any product, and the government imposes this cost increase in the hopes of “leveling the playing field”. In terms of Trump’s tariffs, the goal is to make the U.S. self-sufficient, save dying industries, and protect U.S. intellectual property. A tariff makes products crossing the border more expensive, which, in theory, should provide an incentive to assemble and create products in the United States.  In return, this could lead to job creation and more reason for companies to do business within the United States.


Short-Term Effects

In the short term, tariffs threaten to hurt some American industries. China announced Monday that they will raise tariffs on $60 billion of American goods. American farming and chemical makers are bracing for hits to their revenue. Many farmers use Chinese products and machinery in order to grow crops, and these products will now have an additional cost. The short term fallout for investors has been more prominent with the Dow Jones industrial average dropping by 600 points on Monday. This is due to multinational corporations with significant exports, seeing less revenue and profits overall. In the long term, things are much more uncertain.


Long Term Effects

Talks between both countries are still ongoing and no clear trade agreement is on the table. The good news is there is a trade summit with China at the end of March, that could reshape the trade agreement between the United States and China. Long term damage could be imminent with the current trajectory of the trade war. Manufacturers and farmers will take a hit however, ultimately individual Americans will pay for the higher tariffs. The new policies also threaten the flow of Chinese investment in the United States. The United States has also done damage to America’s reputation as a reliable trade partner. On the positive side, the trade war could lead to China accepting a fair trade deal. Tariffs are seen as a way to bring back these jobs. According to the National Association of Manufacturing, tariffs on China could help protect intellectual property, but also raise the cost of manufacturing. China has largely operated without any opposition to intellectual property theft and currency manipulation, tariffs are seen as a way to encourage China to follow trade agreements previously established, and also convince them to come to a new trade agreement.


Tariffs and the Automotive and Diesel Industry

Now that we know how tariffs can impact manufacturing, let’s look at how the diesel and automotive industry will be impacted in particular. Cummins, the diesel and natural gas engine maker, says it expects $250 million in tariff-related costs in 2019. The engine maker predicts $150 million will be from direct tariffs and $100 million to be from increased metal prices. Bill Hanvey, the president and CEO of the Auto Care Association, urged President Trump to not follow through on increased tariffs.  According to the Auto Care Association, the proposed increase from 10% to 25% on Chinese goods would negatively impact manufacturers and the motoring public as a whole. They predict the motoring public would see higher prices on a wide range of products. China was the second largest producer of auto parts imported into the U.S., and totals over $20.1 billion worth of product.


China and the United States Response Going Forward

Starting June 1st, China is retaliating by raising tariffs on $60 billion dollars worth of goods. This is in direct response to the U.S decision to hike tariffs on Chinese goods. China has decided to increase these tariffs on more than 5,000 products, some increases will go as high as 25% while other goods are increasing to 20%. Previously, these rates were set between 10% and 5%. This will further increase the conflict between the two economies and could potentially damage the global economy as well. If China decides to not back down on tariffs and not come to an agreement, we could see the entire global economy suffer. Prices of imported and exported goods will continue to rise and as a result, the entire global economy could take a hit. China could decide to raise tariffs even more than they already have some think it could even trigger another global recession like in 2008. The Chinese economy is already shaky and a serious shock could send it into free fall. On the flip side, China could decide to put their differences aside and decide to negotiate with the United States. This would hurt them economically in the short term because they would have to follow regulations which they have been ignoring for years. This could cause China to have to abide by Intellectual Property Laws, which has given the Chinese an advantage for years. Leveling the playing field means somebody loses, and in this case, China would be the biggest loser.

If the United States continues to play hardball with China, the economic impacts won’t be as severe as it would be for China. American workers, particularly in the agricultural and manufacturing industry, will pay higher prices for goods as this trade war continues. These prices could, in theory, go higher if the trade war becomes more extreme, with either side refusing to give any room to the other. However, if the United States decides to back down now, it could be even worse for our economy. This retreat of economic activity would be seen as a weakness, and the Chinese would take full advantage by manipulating the economy more than it already is. The best scenario for both countries is to come to an agreement fast so the economy can be allowed to flourish on its own.


Overall, the impact of tariffs on the economy is not black and white as some may think. It is a complicated issue with many variables that are changing daily. The long term effects could be much worse than the short term if both countries cannot come to an agreement. As it stands now, both countries are suffering due to this trade war. The United States needs to stay strong, in order to ensure that our trade in China is fair and complies with international laws.


The Dirt on Diesel Fuel Filter Ratings

diesel filter manufacturersFor many diesel drivers, fuel filtration can prove to be confusing. They know it’s an important part of their engine’s overall good health, but don’t often get into the details. Today’s diesel fuel systems are highly efficient, providing an estimated 45 MPG on the highway and they demand quality filtration to help them run at peak efficiency. To keep up with the ever-changing filter industry, it’s important to know all there is to know about the filtration standards as diesel engine technology continues to advance. You’ve likely invested a lot of money into your diesel vehicle and you want to make sure that investment stays protected. One way you can do this is by learning how diesel filter manufacturers rate their filters and how effective they are. What do the various ratings mean and how critical are they for keeping your diesel engine running smoothly?

What is a filter rating?
The main job of diesel fuel filters is to work with the diesel fuel pump to keep out impurities like water, rust and dirt, to prevent them from passing on through the filter. Fuel filter manufacturers rate their products depending on their ability to prevent particles of a certain size to pass through. This rating is given by diesel filter manufacturers in a number of microns, and the number depends on how large or small the particles are which the filter can effectively remove. But the number alone doesn’t determine the ultimate effectiveness of a filter. Other factors include Absoulte, Nominal and Beta Ratings.

Absolute isn’t always absolute
Absolute Rating, a term given by diesel filter manufacturers, might sound like it means that a particle no bigger than a given size will pass through the holes in a filter. It should mean that if a particle is larger than the hole, it won’t pass through. But there is some discrepancy between filters that are tested in a lab using glass beads and a real world situation where temperatures in an engine are going to be higher with more vibration. Also, variances in manufacturing can create differences within the filter where the pores may not all be consistent in size. This creates the possibility that if you have a filter that is 10 microns in size for example, that a larger particle might sneak through. But the definition of Absolute Rating ensures that the number stated is the upper limit of the filter.

Nominal isn’t always nominal
Along with a filter’s Absolute Rating, its Nominal Rating reflects the ability to prevent a certain percentage of particles over a given size from getting through. The figure given for a Nominal Rating might be stated as “95% of 10 microns”, which translates into the filter trapping nearly all particles 10 microns and larger from getting through. But on the flip side, a small percentage of particles over 10 microns might not be caught.

Beta Rating: Combining Absolute and Nominal
Since the above ratings scales have some constraints, the diesel fuel systems industry developed the Beta Rating, which takes into account both the size of the particles which pass through the filter and how many make it. For example, a filter that is assigned a Beta Rating of “2 of 10 microns” means that in laboratory testing using a 10 micron filter, 2 particles were detected as being trapped by the filter, whereas 1 particle was detected as passing through. In other words, a filter with a Beta Rating of 2 successfully filters out 50% of the particles thrown at it. Obviously here you want to look for a filter with a high Beta Rating, as that means it will be more effective in keeping contaminants out.

When researching diesel fuel filters, be sure to keep all of the above information regarding ratings in mind instead of just relying on one number. This will help to maximize the efficiency of the filter. If you still have questions, contact your diesel filter manufacturers or suppliers for more information.