Dutch Export Champions Navigate Trade War by Relocating from China to US

Hans Willemsen, director of Wila, a Dutch company specializing in machinery for bending sheet metal, described the company's strategic shift from China to the United States. Wila, a global leader in its niche, produces tools and clamping devices used in industries ranging from shipbuilding to smartphone manufacturing. The company operates a factory in Lochem, Netherlands, and previously had a significant production facility in Taicang, China, which opened in 2018.

Willemsen explained that the decision to invest in China was initially driven by the desire to be closer to their growing customer base there. However, market dynamics shifted during the COVID-19 pandemic. Chinese customers became hesitant to invest in advanced systems, reverting to more traditional, labor-intensive machinery. This led to overproduction for the Chinese market and necessitated exporting finished goods back to Europe and the US, increasing logistical costs for raw materials and finished products.

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Chinese customers shied away from investments in more advanced systems and returned to conventional machines that are more employee-driven.

In 2023, Wila decided to move its Chinese operations to Louisville, Kentucky. This move proved fortuitous, as the US factory became operational just before former President Donald Trump introduced significant and fluctuating import tariffs. Willemsen noted that producing in the US was a strategic decision made before the tariff uncertainty, aiming to leverage their existing market share in America. The company's move highlights the challenges and strategic adjustments faced by global manufacturers navigating trade tensions and evolving market demands.

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We incurred too many costs for the transport of steel and other raw materials to China and for that of the finished products that then came back.