Rock Products

AUG 2019

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www.rockproducts.com ROCK products • August 2019 • 69 Aggregates Industry Almanac Equipment Update when 23% picked that range. About 23% plan to spend $1-5 million this year. Approximately 18% planned to spend $500,000-$1 million. And what do they plan to buy? • Equipment upgrades, 58.75%. • New equipment, 57.50%. • Mine development, 33.75%. • Plant additions, 32.50%. • Permitting and bonding, 32.50%. • Technology upgrades, 32.50%. • Exploration, 20.00%. • New plant construction, 22.50%. • Quality control, 17.50%. • New mine start up, 16.25%. • Used equipment, 11.25%. • Reclaim systems, 10.00%. • Other, 5.00%. Over and above consumables, such as oil, safety supplies, maintenance equipment, tires and replacement parts, the top equipment areas being considered for 2019 are: • Material handling/conveying equipment, 49.35%. • Pick-up/Utility Vehicles, 45.45%. • Excavators/loaders/dredges, 44.16%. • Screening and sizing equipment, 44.16%. • Motors, 37.66%. • Pumps, 37.66%. • Drilling and blasting suppliers/services, 32.47%. • Washing and classifying equipment, 27.27%. • Automation products, 23.38%. • Portable crushing/screening plants, 23.38%. • Scales, 22.08%. • Haul trucks, 22.08%. • Crushers, 20.78%. • Breakers, 18.18%. • Energy management, 16.88%. • Drones, 11.69%. • Frac sand equipment, 5.19%. • Other, 3.90%. Tariffs With tariffs continuing to take a toll on U.S. businesses, farmers, communities, and families across the country, a new report by IHS Markit outlines the impact of tariffs on the equipment manufacturing industry and the broader U.S. economy. "This report shows that tariffs continue to take a toll on U.S. equipment manufacturers, who will pay significantly more to manufacture equipment in the United States in the coming years," said Dennis Slater, president of the Associ- ation of Equipment Manufacturers (AEM). "Tariffs on steel, aluminum, and Chinese imports, as well as the potential for additional tariffs, are driving up the cost of production, delaying capital investments, and impeding job creation for our more than 1,000 member companies." "While we agree with the Trump administration's concerns regarding China's unfair trade practices, including weak intellectual property protections, restrictions on foreign investment, and policies that limit competition, tariffs only hurt America's businesses, workers, and families," said John Garrison, chairman of the board, president and CEO of Terex Corp. and an AEM board member. "We urge the Trump admin- istration to negotiate solutions to these long-standing issues with China, de-escalate economic tensions, and remove broad unilateral tariffs." The report, "The Economic and Industry Impact of Pro- tectionism Tariffs on the Off-Highway Equipment Sector," estimates the impact of the Trump administration's Section 232 and Section 301 tariffs. Several of the report's key find- ings speak to the significant, long-term impact on the U.S. economy, including: •  Placing tariffs on about $265 billion of imports will hurt the U.S. economy, largely from the direct effect of higher prices, yielding average lost GDP of $29 billion a year for 10 years. • The effect on employment is negative; the tariffs will sup- press domestic job gains by 260,000 over 10 years. •  Consumers will pay higher prices and reduce their real spending by $23 billion per year throughout the forecast horizon (ending in 2027). The report also highlights specific impacts on the equipment manufacturing industry: •  Tariffs will increase costs of producing U.S. agriculture and construction equipment by 6%; with its higher steel-re- lated product content, the costs of producing U.S. mining equipment will increase 7%. • Total loss in employment related to diminished output of all off-highway equipment is projected to end the forecast period with a loss of 20,700 jobs. Equipment manufacturing executives have attributed the increasing costs of manufacturing in the United States to the Trump administration's tariffs. In fact, Tariffs Hurt the Heartland – a campaign backed by AEM – found that the Trump administration's tariffs are costing businesses up to $2.7 billion each month and have caused exports of Amer- ican products to plummet by 37%. Tariffs Hurt the Heartland has also issued state impact reports for several states, includ- ing Wisconsin, Pennsylvania, Ohio, Michigan and Indiana. There are currently tariffs on $250 billion dollars' worth of imports from China as a result of the Trump Administration's use of Section 301 of the Trade Act of 1974. This amount equals half of the total amount of goods imported into the U.S. from China in 2017. Separately, Section 232 tariffs or quotas on steel and aluminum imports have raised the cost of manufacturing equipment in the United States. Equip- ment manufacturers need free and fair trade, but as a result

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