The COVID-19 pandemic has created temporary trade restrictions between countries. Slightly before the pandemic, China and the United States were already embroiled in a serious trade war characterized by unfavorable policies that adversely affected the flow of commodities between the two countries. The pandemic, combined with the trade wars, has resulted in economic nationalism. The general landscape of material processing for industry, such as the fabrication of materials for industrial processes, has significantly changed. Particularly, metal-casting is among the most affected sectors in the world today. The pandemic has adverse effects on the production of metals. The tariff problems between the US and China, coupled with the pandemic's effects, have created a difficult period for metal production, particularly steel. The current state of material processing in the world is at a recovery period. As countries continue to slowly reopen the economy, industries are determined to recover their previous production levels. However, with the trade relationships between the US and China remaining complex, industries relying on these trade routes are less likely to recover from the pandemic's shocking effects.
Before the pandemic, research showed that various manufacturing industries were on course to occupy more market share. Metal casting is among the most common and profitable manufacturing industries due to the high demand for the products. Specifically, the industry has consistently experienced a sharp rise in demands from the automotive sector. However, the pandemic's onset has initiated major setbacks in a sector that was previously known for its growth. As countries have continued to impose lockdowns, many countries' building and construction industries have continued to suffer due to a chronic shortage of supply (Guan et al., 2020). The rapid growth of the automobile industry in China made it one of the most significant markets globally regarding metal casting. However, China was the epitome of the COVID-19 pandemic that has caused havoc globally (Guan et al., 2020). Therefore, it is only natural that the industry was halted due to the much-important public health concerns. Also, this meant that the rest of the world had to suffer from the affected supply chain pathways across the globe. All automobile and building, and construction industry that relied on metal casting felt the effect of the shortage.
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Besides the pandemic, the trade war between the US and China has also strained the flow of commodities between two of the world's largest markets. Donald Trump's administration began a serious trade war based on two fundamental reasons. First, China enjoyed a massive trade surplus with the US. Secondly, most US companies complained of rampant intellectual property (IP) theft in China (Li, He, & Lin, 2018). Each country responded by placing heavy tariffs on the others’ goods. The metal casting industry was significantly affected after the US government imposed tariffs on steel and aluminum. The American Iron and Steel industry appreciated the president's move and regarded it as essential to the economy. However, this decision did not sit well with the Aluminum Association. According to this organization, the US cannot produce all aluminum needed by the American producers. Therefore, the trade wars between the two countries will continue to have adverse implications on the engineering and construction sectors' global economic dynamics.
With the pandemic already disrupting the global market, the metal casting industry must engage in several changes to ensure that it reverts to its initial status before the pandemic. Companies in this industry must invest in forecasting to understand the future market dynamics. The metal casting sector's performance depends on the dynamics in other sectors such as construction, automobile, and engineering (COVID-19: What it means for metals manufacturing). With the pandemic, many governments classified this industry as non-essential, resulting in closure. Such a trend in the near future is more likely to adversely affect the metal casting industry, thanks to the reduced demand. For instance, the engineering and construction industry is expected to face prolonged closures as more sites are closed as they are deemed non-essential. Therefore, this has created a chronic reduction in the demand for steel and other crucial metals.
Companies must also look into new opportunities in the market. For instance, metal casting companies specifically focused on aluminum and metals should redirect their focus to other areas such as defense and aerospace. The objective is to explore new markets and assess whether they can capitalize on the new demands (COVID-19: What it means for metals manufacturing). More importantly, this endeavor is critical in ensuring that the market remains as diverse as possible. A more diverse market is likely to wither off the effects of the pandemic and trade wars like the one experienced between China and the US.
In conclusion, the current state of material processing for the industry does not look good. The pandemic has created an unprecedented market environment characterized by regulations that adversely affect business. The flow of commodities between countries has continued to suffer as nations continue to take strict measures to combat the virus. Trade wars between China and America have continued to affect business between the two countries. As each nation imposes tariffs on the goods of the other, industries reliant on these materials are the biggest casualties. In response, the metal casting industry must remain bold and exploit new markets in the hope of diversifying. The industry must also increase in forecasting ability to assess markets that present the biggest opportunities and threats.
References
COVID-19: What it means for metals manufacturing https://www.pwc.com/us/en/library/covid-19/coronavirus-impacts-metals.html
Guan, D., Wang, D., Hallegatte, S., Davis, S. J., Huo, J., Li, S. ... & Gong, P. (2020). Global supply-chain effects of COVID-19 control measures. Nature Human Behavior , 1-11.
Li, C., He, C., & Lin, C. (2018). Economic impacts of the possible China-US trade war. Emerging Markets Finance and Trade , 54 (7), 1557-1577.
