EAST LONGMEADOW, Mass. — The ongoing trade war has created significant challenges for many businesses, leading to clipped stock values, a weakened dollar, and a downturn in the U.S. economy. However, at the Excel Dryer plant, Chief Operating Officer William Gagnon remains optimistic. In fact, the tariffs imposed by President Donald Trump have proven advantageous for Excel, one of the world's largest manufacturers of restroom hand dryers. Gagnon believes these tariffs have transformed the landscape of production location decisions, enabling Excel to establish an all-domestic supply chain that protects the company from the uncertainties affecting U.S. manufacturing.
With the new tariff regime, Excel Dryer has gained a competitive edge over rivals that rely on imported hand dryers. Gagnon expressed hope that Trump’s proposed “reciprocal” tariffs could further eliminate trade barriers, allowing Excel’s high-velocity hand dryers to gain traction in international markets such as Brazil and Australia. "We’re really looking to grow our international representation, but are facing numerous barriers to entry," Gagnon stated. "The reciprocal tariff approach could open up more international markets for us."
While Gagnon and Excel Dryer view tariffs favorably, many manufacturers across the U.S. have voiced concerns. The impact of tariffs has made planning and investment exceedingly difficult, with a recent Washington Post-ABC News-Ipsos poll revealing that Americans disapprove of the tariffs by a margin of nearly 2 to 1. Overall, 64 percent of adults surveyed expressed disapproval, including a notable 70 percent of political independents.
For Excel, the tariffs have made foreign goods more expensive, thereby enhancing the competitiveness of domestic suppliers. The heightened costs discourage consumers from opting for cheaper alternatives, particularly Chinese hand dryer copies. Furthermore, Gagnon is hopeful that the tariffs will facilitate access to foreign markets, contingent on successful negotiations with other nations. Excel anticipates a revenue of approximately $40 million this year and takes pride in sourcing all of its major components from American suppliers.
The company's flagship product, the Xlerator, has gained widespread acclaim since its introduction in 2000. Its powerful design can be found in prominent locations, including Grand Central Terminal in New York and various Buffalo Wild Wings restaurants nationwide. Excel’s commitment to sourcing domestic components for the Xlerator aligns with a broader trend of American manufacturers re-evaluating their supply chains, especially after the recent global disruptions.
Despite its successes, Excel Dryer recognizes the complexities of reshoring manufacturing. Korey Bell, president of Westside Finishing, a supplier to Excel, remarked on the growing realization that many essential products must be produced domestically. "We’ve gone too far in offshoring manufacturing jobs," Bell noted, emphasizing the urgent need for domestic infrastructure to meet critical needs.
Excel Dryer had been aiming to increase its use of domestic components even before Trump’s election in 2016. A significant challenge lay in sourcing the motor for the Xlerator, as Chinese manufacturers historically offered a cost advantage. After extensive searching, Excel found a suitable domestic supplier in the Scott Fetzer Electrical Group in Fairview, Tennessee. Gagnon credits the tariffs with helping to close the price gap, making the switch from China feasible.
Gagnon has fostered a collaborative relationship with Fetzer, allowing both companies to innovate and refine motor designs. Unlike the distant, transactional relationship with Chinese suppliers, Gagnon emphasizes the benefits of working closely with U.S. partners that enable quicker and more effective problem resolution.
Excel's progress does not imply that all manufacturing can be easily returned to the U.S. The decision to source locally or internationally is influenced by various factors, including the size of the manufacturer. Smaller companies like Excel may face higher shipping costs and logistical challenges, making it more complex to compete with low-wage countries like China for certain products.
One of Excel’s local suppliers, Double A Molding in Monson, Massachusetts, has also felt the effects of Trump’s tariffs. The company produces essential components for the Xlerator and has adjusted its sourcing strategies in response to increased costs associated with Chinese imports. The transition to a U.S. vendor has resulted in a 10 to 15 percent increase in costs, but it allows for quicker response times to Excel’s needs.
Despite the potential for growth in U.S. manufacturing, Double A’s owner, Ross Wulfing, raised concerns about labor availability. With average pay for operator positions around $21 an hour, finding sufficient workers remains a challenge. "If we increase our capacity by 25 percent, I don’t know if we could get the people to actually do it," Wulfing expressed.
Even as Double A Molding sources over 90 percent of its raw materials domestically, it still relies on a Chinese supplier for a critical flame-retardant chemical additive. This dependency highlights the hidden exposure that many U.S. manufacturers face regarding Chinese supply chains. The challenges of sourcing machinery and spare parts from abroad further complicate the landscape, emphasizing the ongoing need for strategic planning in U.S. manufacturing.
