Flemish rack manufacturer stow and its subsidiary Movu see America as a major growth market. But Trump's import tariffs are threatening to throw a spanner in the works. "There are containers on the way now and no one knows how much duty we will have to pay on them," says Movu.
Will it be 10 percent? Or will it be 20 percent? Jos de Vuyst, ceo of shelving manufacturer Stow, has to manage his business from day to day through the total unpredictability of the tariff war unleashed by U.S. President Donald Trump. Stow is a company that produces metal shelving for warehouses, and has its origins in Mouscron. The company boomed with the development of e-commerce, turns €1 billion in sales and has 10 factories across Europe. The company also exports to the US.
Three years ago, Stow founded its subsidiary Movu, which builds high-tech robots that take over the roles of warehouse workers and forklift drivers. The tight labor market is giving Movu wings and is the crowbar with which Stow and Movu are now rapidly growing in the U.S. market as well.
But that's where import duties come in. On steel racks, these have been 25 percent since March 12. On robots, it's 10 percent for now, unless Trump soon does revert to the original 20 percent he announced on April 12 - 'Liberation Day' - for European imports. "There are containers now on their way to the U.S. that no one in the entire company can say whether we will have to pay 10 or 20 percent on them. And that's cash to pay off at the border before we can load them on trucks to our customers."
Our decision to build a plant in the U.S. is now proving to be a godsend
Jos De Vuyst CEO STOW EN MOVU
Expensive American steel
Because those are existing contracts, and Movu and stow import through their U.S. subsidiary, the bill comes to them. "Not our problem, several customers say. That will cost us several million dollars in the coming months." For new contracts, De Vuyst does think he can pass on the additional costs to his customers. Starting with the racks. Even with a 25 percent charge on European steel products, they could still remain cheaper than U.S. products. "The price of steel has become 25 percent more expensive in the U.S. in recent months, partly because of trade restrictions, which means less cheaper European and Chinese steel is entering the U.S. market. And the US is already producing less steel than it needs. That shortage will now grow." Still, stow is planning its own plant in the US. That decision had already been made a year and a half ago. After all, De Vuyst is convinced that if stow wants to conquer the American market, the company must have a factory there. Also because of the high transportation costs. "A godsend," De Vuyst now calls that decision. "With that, we will escape the levies for the racks."
Short pain
The new plant would be operational from April 1, 2026. "I actually do support partial relocation of industrial production. Covid has taught us how incredibly fragile and complex global supply chains have become. Just one little wheel has to break, like a stranded ship in the Red Sea, and the whole chain is in tatters." So those plans were in place before Trump pushed through his reindustrialization agenda. De Vuyst is also very appreciative of the potential support from U.S. governments. "But whether we will find it in the overheated U.S. labor market? That remains to be seen." The robots are a different story for now. "Those are so high-tech and unique that our American customers are willing to pay the extra price," De Vuyst says. "Those are still all made in Lokeren. But we are investigating whether we can replace certain Asian parts." In short, for Movu and stow, the extra cost on current contracts will be a relatively short pain in the coming months, and they will be able to pass on most of the tariffs to their U.S. customers thereafter. This confirms the theory of many economists that the import tariffs will actually turn out to be a tax on U.S. consumers.
Chinese competition
Still, De Vuyst is deeply concerned about the chaos caused by the Trump administration. "I still hope that common sense returns, with these policies the US, and with them the world, are heading for a recession. And then we have to radically adjust our growth plans. If the end user loses purchasing power because of these tariffs, there will be less logistics, there will be less automation, and we will really feel it." Moreover, he fears, an all-out trade war between the U.S. and China would also hit stow and Movu in Europe. "In the U.S. market, our Chinese competitors would disappear, which seems like good news. But there is a high risk that they would then dump their products on the European market." After all, China also makes warehouse robots. They are of lesser quality than Movu's and for now are exported little to the EU because U.S. sales are large enough. "But if China can no longer sell its warehouse robots in the U.S., they will come to Europe with them. And I fear that the EU will not protect us from that, or will do so too late."
Source: © De Standaard, Lieven Sioen