Tariffs Prompt Foreign Manufacturers to Expand U.S. Production
Kentucky’s business-friendly legislation and strong focus on industrial recruitment are showing results for our region
By Jeff Jobe
Community Publisher
As a result of U.S. tariffs on imported goods, multinational manufacturing firms like Union Coating & Chemical Industries and Kingspan Group are strategically increasing their U.S. production capabilities to mitigate rising costs. The move demonstrates how trade policy can influence foreign direct investment and create domestic jobs.
Union Coating & Chemical Industries expands into Glasgow, Kentucky
The Egypt-based Union Coating & Chemical Industries recently announced plans to establish its first U.S. manufacturing facility in Glasgow, Kentucky. The new operation will initially produce powder coating compounds, allowing the company to avoid tariffs on finished products that would otherwise be imported from its plants in Egypt, Germany, and Saudi Arabia. However, the company will still face tariffs on imported raw materials, such as pigments and specialty additives. This exposure to tariffs on inputs was a key factor in the company’s decision to localize production.
Kingspan Group invests $1 billion in U.S. facilities
Similarly, the Kingspan Group is making substantial investments to shift from an import-heavy model to a domestic production one. The company is expanding its U.S. capital investment to $1 billion over five years. New roofing facilities have been announced in Maryland and Oklahoma and are expected to be in production in 2026. An additional investment for a potential shingle line will also be located at its Oklahoma campus, offering expansion. A newly acquired subsidiary, Tate Access Flooring, recently selected Glasgow, Kentucky, for its largest North American facility. By producing more goods within the U.S., Kingspan aims to minimize its tariff exposure on finished goods and raw materials, including those affected by steel and aluminum tariffs.
Tariffs as a catalyst for investment
The strategic decisions of both companies illustrate how tariffs can serve as a catalyst for foreign companies to invest in U.S. manufacturing. The need to control costs associated with imported materials and finished products incentivizes the creation of domestic production lines, ultimately supporting local economies and creating jobs.
My Thoughts:
Tariffs are new and still uncertain for some industry. They alone won’t equal success for any state if they don’t have business friendly legislation.
Kentucky legislators have known this for a long time and in 2017 they stepped out and repealed Prevailing Wages and passed Right to Work laws; removing barriers hurting our state for decades.
While Governor Andy Beshear (D) is on the record challenging President Donald Trump (R) Tariff’s and former Kentucky Governor Matt Bevin (R) legislative successes in pushing through Right to Work and the elimination of Prevailing Wages; Beshear has done an amazing job at state-wide industrial recruitment and the region is now benefiting from the hard work of each of these men.
