Charles R. Goulding and Preeti Sulibhavi explain how Trane, JCI, Eaton, and Acuity Brands can leverage their domestic manufacturing edge and invest further in 3D printing to outpace competitors in a tariff-laden market.
With President Donald Trump’s administration imposing new tariffs on imports from China, Mexico, and Canada, many companies are facing significant cost increases.
Barron’s recently covered four companies this February that are relatively insulated from recent import tariff increases. Our thesis is that these companies should use their tariff shield for further 3D printing technology investments. They are ahead of their competitors and should use this to their investment advantage.
Companies with strong domestic production capabilities, such as Trane Technologies, Johnson Controls International (JCI), Eaton Corp, and Acuity Brands, are relatively insulated from these tariff hikes. These firms have made substantial investments in advanced manufacturing technologies, including 3D printing, robotics, and automation, positioning themselves ahead of competitors reliant on foreign supply chains. By further leveraging these technologies, they can mitigate supply chain disruptions, reduce costs, and enhance product innovation.
3D Printing: A Key Driver of Domestic Manufacturing
3D printing has evolved beyond prototyping and is now an integral part of modern manufacturing processes. It allows companies to produce complex components quickly and cost-effectively while reducing waste. For U.S.-based manufacturers facing tariff challenges, additive manufacturing provides a crucial competitive edge. Trane, JCI, Eaton, and Acuity have already integrated 3D printing into their production lines in various ways, demonstrating the technology’s transformative potential.
How These Companies Are Using 3D Printing
1. Trane Technologies: Revolutionizing HVAC Components
Trane Technologies, a leader in heating, ventilation, and air conditioning (HVAC) solutions, has embraced 3D printing to improve efficiency and sustainability in its manufacturing processes. One recent example is Trane’s development of custom-designed, 3D printed fan blades that optimize airflow while reducing noise and energy consumption. These fan blades, created using high-performance composite materials, allow Trane to produce more efficient HVAC units domestically, reducing dependence on imported parts subject to tariffs.
Additionally, Trane has deployed additive manufacturing for rapid prototyping of complex heat exchanger components. By leveraging 3D printing, Trane has cut down product development cycles by 30%, enabling faster innovation and response to customer needs.
Below is Trane’s research and development expenditures over the past few years.
2. Johnson Controls International (JCI): Enhancing Smart Building Solutions
JCI, a global leader in building automation and security systems, has integrated 3D printing into its product development and manufacturing. One notable initiative is JCI’s use of additive manufacturing to produce custom enclosures for its smart thermostats and control panels. These enclosures, previously sourced from overseas suppliers, are now being printed in-house at JCI’s U.S. manufacturing facilities, reducing lead times and ensuring compliance with domestic regulatory standards.
Furthermore, JCI has collaborated with research institutions to develop 3D printed sensors used in energy-efficient HVAC systems. These sensors, designed for real-time monitoring and predictive maintenance, improve energy savings for commercial buildings and align with the industry’s push toward sustainability.
3. Eaton Corp: Advancing Electrical Component Manufacturing
Eaton Corp, a major player in electrical power management solutions, has been at the forefront of 3D printing adoption. One significant application of 3D printing at Eaton is the production of lightweight, high-performance circuit breaker housings. Using additive manufacturing, Eaton has successfully redesigned these components to enhance durability and reduce material usage, leading to a 20% decrease in production costs.
Eaton has also leveraged 3D printing for the on-demand manufacturing of spare parts for its power distribution equipment. By maintaining a digital inventory and printing parts when needed, Eaton reduces downtime for customers and minimizes the need for extensive warehousing of replacement components.
Below is Eaton’s recent investments in research and development:
4. Acuity Brands: Customization in Lighting Solutions
Acuity Brands, a leading provider of lighting and building management solutions, has embraced 3D printing to drive customization and efficiency. One of Acuity’s most recent innovations is the production of 3D printed LED light fixtures tailored to specific architectural designs. This capability allows architects and designers to create unique lighting solutions without the constraints of traditional manufacturing methods. The A-Light product line that Acuity offers utilizes 3D printing technology.
Moreover, Acuity has utilized 3D printing to develop advanced optics for its smart lighting systems. These optics enhance light distribution, improving energy efficiency and performance in commercial and industrial spaces. By manufacturing these components domestically, Acuity reduces reliance on imported optical materials, insulating itself from tariff-related cost increases.
Below is a table that presents Acuity’s most recent investments in R&D:
The Competitive Advantage of Further Investment
The insulation from tariff increases gives Trane, JCI, Eaton, and Acuity a unique opportunity to double down on their investments in 3D printing technology. By expanding their additive manufacturing capabilities, they can:
- Further reduce reliance on foreign suppliers and mitigate supply chain risks.
- Accelerate product development and bring innovations to market faster.
- Enhance sustainability by minimizing waste and optimizing material usage.
- Strengthen their domestic manufacturing footprint, creating more jobs and supporting local economies.
The Research & Development Tax Credit
The now permanent Research and Development (R&D) Tax Credit is available for companies developing new or improved products, processes and/or software.
3D printing can help boost a company’s R&D Tax Credits. Wages for technical employees creating, testing and revising 3D printed prototypes are typically eligible expenses toward the R&D Tax Credit. Similarly, when used as a method of improving a process, time spent integrating 3D printing hardware and software can also be an eligible R&D expense. Lastly, when used for modeling and preproduction, the costs of filaments consumed during the development process may also be recovered.
Whether it is used for creating and testing prototypes or for final production, 3D printing is a great indicator that R&D Credit-eligible activities are taking place. Companies implementing this technology at any point should consider taking advantage of R&D Tax Credits.
Conclusion: Seizing the Moment
With mounting trade tensions and uncertainty in global supply chains, advanced manufacturing technologies like 3D printing are more critical than ever. Companies like Trane, JCI, Eaton, and Acuity have already demonstrated leadership in leveraging additive manufacturing to enhance their operations. Now, with the added advantage of tariff insulation, these firms should seize the moment to further invest in 3D printing. Doing so will not only solidify their market position but also drive long-term growth, innovation, and sustainability in U.S. manufacturing.
