Well positioned! Robot specialist ABB is not afraid of US tariffs

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FAULHABER Drive Systems

ABB's philosophy is local production. That's why the Swiss wouldn't break a sweat over the US tariffs...

Industrial policy has changed worldwide. Everywhere, governments—and also users—are demanding that companies like ABB produce close to the respective markets, according to ABB. Planned investments in two plants in the USA (Tennessee and Mississippi) totaling $120 million are not due to the tariff policy of US President Donald Trump. "The decision was made before his time. It is part of our long-term strategy to strengthen local production," commented Peter Voser, Chairman of the ABB Board of Directors. ABB's strategy is not anyway based on election events but on long-term trends (such as climate protection, energy efficiency, and automation). Due to the new tariffs, the sale of imported cars in the USA is likely to decrease, as local sales prices increase. And this effect could have certain negative impacts on supply chains in the manufacturing countries. However, Voser considers the risk for ABB to be manageable. It's not easy to keep track of all the new decrees the US government is putting into effect day by day, but fundamentally, "Trump 2.0" hasn't changed much.

The global economy is currently aligning itself in a multipolar manner

According to Voser, the world has been moving away from a US-dominated world towards a multipolar order for some time. This can be seen in the clearly more national orientation of the USA. Voser does not expect that companies will have to choose for or against certain economic areas in the future. But one should try to separate geographical areas and think as locally as possible. "We are already doing that," notes Voser. However, business areas that pursue military goals (such as drones) or operate very closely with governments are becoming more important. "In view of what is happening with the USA, Europe must strengthen its relations with other regions—especially Asia and China," says Voser. The West will have to accept, however, that other countries have different value systems. Therefore, Europe and also Switzerland will have to make concessions if they want to continue benefiting from global growth. After all, the largest sales market for Switzerland is the EU. Therefore, an agreement securing access to this market is needed.

The European export engine must not stop

Without this secured access, there will be clear losers. The many small and medium-sized enterprises in Switzerland, which cannot react as flexibly as ABB, cannot easily relocate their production abroad. Therefore, according to Voser, the politics must finally understand how important market access is for such SMEs. Moreover, a certain spirit of optimism is already noticeable in Europe. The vast sums being released in Germany and Europe are likely to strengthen competitiveness, despite all the risks that an uncapped lifting of the debt brake in Germany entails. Europe has always been an export machine and an engine of innovation. In Voser's opinion, this strength must remain the driving force for future viability.

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