MV Pro 002 – Trump and the Vision Industry w/ Ronald Mueller, Vision Markets

Click the arrow to easily access sections of the podcast transcript below!

1. Introduction to Ronald Mueller and VisionMarkets

• Overview of Ronald Mueller’s background as Managing Partner at VisionMarkets and a feature writer for MV Pro.
• Detailed explanation of VisionMarkets’ services, including strategy consulting, M&A, recruitment consulting, and marketing.

2. Trump’s Economic Policies and Their Global Impact

• Discussion of Donald Trump’s economic policies and their potential effects on the machine vision industry.
• Predictions in Ron’s article about decoupling from China, reshoring to the US, and impacts on global markets, including Europe, Southeast Asia, and India.
• Ron’ss assessment of the early effects of Trump’s administration, including the impact of tariffs on US inflation, the dollar’s value, and interest rates.
• How the stronger dollar is making US competitors less attractive to non-US companies, especially in Europe and Asia.

3. The Reshoring Trend and US Manufacturing

• Discussion on the acceleration of reshoring trends in the US and the role of investments in manufacturing facilities.
• Timeline for the effects of reshoring, expected by mid to late 2025, and its impact on automation and the labor market.

4. Decoupling from China and Shifting Global Supply Chains

• The decoupling from China and its effects on the global supply chain, including the relocation of manufacturing to the US, Mexico, Eastern Europe, and Southeast Asia.
• The advantages and challenges of relocating manufacturing depending on product type, with an emphasis on automation and labor costs.

5. The Future Outlook for Global Markets and Machine Vision

The role of machine vision in automating production processes and lowering costs for industries in these regions, as well as opportunities for foreign investment.

Exploration of emerging markets, particularly Southeast Asia and India, and their growth potential over the next 5-20 years.

6. How to contact Ronald Mueller and Josh

• https://www.linkedin.com/in/ronald-mueller/
• https://www.linkedin.com/in/jkeastburn/
• editor@mvpromedia.com
• josh.eastburn@mvpromedia.com

Episode Transcript

1. Introduction to Ronald Mueller and VisionMarkets

Welcome back to the MV Pro podcast. Last month, Donald Trump began his administration as the 47th President of the United States. Ronald Mueller, Managing Partner at Vision Markets and Features writer for MV Pro magazine, weighed in on how the new President’s economic policies are likely to affect the machine vision industry in his article titled, Trump: Elected by the Wallets. One month into the new administration, I got to sit down with Ron to talk about his predictions in greater depth. I hope you enjoy our conversation.

[00:00:29.790]

Well, Well, why don’t we start by letting you introduce yourself? I know you’re a managing partner at VisionMarkets, as well as a feature writer for MV Pro. Why don’t you tell us a little bit about what VisionMarkets does?

[00:00:43.630] – Ronald Mueller

Sure. Visionmarkets is a management consulting company that’s dedicated to the global machine vision market and automation market, as a machine manufacturing automation market. We have basically four different business lines that we are offering to our clients. One is strategy consulting that Rekupre refers to business strategies, management strategies, and includes a good amount of market research. We have a dedicated annually updated market research on the global machine-machine component market, by product type, by industry, by region. The second business line is M&A. Here we are getting investors to find targets and evaluate them wisely and spend their money wisely. At the same time, we are helping companies to get smart money, meaning investors who are actually not just providing them cash, but also providing them access to markets, access to technologies, access to people, and again, for a good valuation at that stage. Third one is recruitment consulting. That’s easier to explain, right? So everywhere where our expertise in vision and in the market is helpful, we are helping companies to find sales managers, product managers, marketing people, FAEs, engineers, R&D engineers, and so on. That’s the third one. And finally, where we have started 10 years ago, was marketing.

[00:02:16.040]

That’s still what we do. We are a fully-fledged marketing agency, and we are helping our customers from the vision space to reach their audience, from the setting up corporate identity all the way down to social media content, video content, a website, a website banishment, and so on. That’s great.

[00:02:35.380] – Josh Eastburn

Yes, great full service. You’re based out of Germany, correct?

[00:02:40.630] – Ronald Mueller

I am, yes. But we have a team, also team members in the US.

[00:02:46.600] – Josh Eastburn

Yeah. Okay.

[00:02:47.900] – Ronald Mueller

So operating- And in India.

2. Trump’s Economic Policies and Their Global Impact

[00:02:50.230] – Josh Eastburn

Oh, okay. Okay, great. So East and West. Yeah. Fantastic. The article that you wrote for the January issue of MV Pro magazine, It shows off your expertise in what’s happening in the global market. You’re talking about issues that are happening in the US primarily, but the impacts you describe affect markets in the East and West. And in talking about it before this interview, I asked you what you thought some of the key impacts were going to be. And you mentioned decoupling from China, reshoring to the US, impacts on the European, Southeast Asian, and Indian markets Which covers most of the world, right? I’m wondering, since you wrote this article, we’ve had the inauguration of President Trump, and we’re now seeing the rollout of some of those policies that he had promised during his campaign. Have you seen anything in these first few weeks of his administration that has surprised you, anything that maybe has caused you to rethink some of the predictions that you made, or is this as expected?

[00:03:58.240] – Ronald Mueller

Well, not so much, actually. It’s the In terms of rethinking, actually, quite the opposite way. Briefly after we have published those implications of, we call Trump 2. 0, the second term of Donald Trump. Shortly after we got one of those predicted implications already materializing. That means it’s a little bit, let’s say, a longer chain of reasoning. But when Trump is imposing tariffs as he already does and is expected to do, when he does that, what this will lead to is, let’s say, keeping the US inflation at an elevated level. When the US inflation is at an elevated level, the Federal Reserve Bank will not be very quick with reducing the interest rate. When the interest rates are staying high, the dollar and dollar investments are still attractive for capital investors because they get interest rates on that. So this again means that the valuation of the dollar remains strong and gets even stronger. When you look at the curve dollar against the Euro, you saw actually quite some peak already at the election of Trump and then even later on at his inauguration. So this elevated valuation of the US dollar, again, is good for players from Europe and from Asia because the US competitors have a higher price tag, and it’s more costly for non-US companies to buy US equipment.

[00:05:33.880]

It’s an advantage for the other players, simple for currency exchange rates. That’s what we already saw materialized in December. Even now, as Jerome Powell has confirmed in his latest hearing, the interest rates will remain higher for longer in the US more than expected. Again, that’s one of the implications. Well, on the other end, the decoupling from China is also as expected, and as we predicted here, is accelerating with Donald Trump and his policies, specifically with the import tower being imposed. Again, what the impact is and what it leads to is that it becomes less attractive for US companies to use Chinese equipment and buy Chinese consumer products. And therefore it is more It’s attractive for Chinese players. But also, you have the same thing in Canada and in Mexico and so on. It’s attractive for manufacturers to have the added value manufacturing inside the US. So you can circumvent the import terrorist. I think that’s one of the implications also which we predicted, and we already see that investment of foreign money to float into the US US, which is just fueled by two aspects. On the one hand, you have a highly attractive US ecosystem now with, so to say, low tariffs to access the US market.

[00:07:15.170]

Also, Donald Trump has announced that he will make the US tax system very friendly to the economy and to companies. So another pull factor to the US. And funny enough, on the other side of the Atlantic, you We have an European Union, which is expert in regulating and which is expert in taxation and expert in labor laws, not so much anymore in innovation and not so much in developing economies and developing manufacturing facilities and so on. It’s a push factor out of Europe and a pull factor into the US. That’s what we see, and that’s also reflected in the sentiment scores that are reported monthly.

3. The Reshoring Trend and US Manufacturing

[00:08:03.100] – Josh Eastburn

I think that’s a good thread. Let’s keep pulling on that. I’ve worked in the manufacturing industry for a long time, and there’s been this discussion over the decades about a offshoring reshoring. What you’re talking about is an acceleration of this trend now towards reshoring. How much do you think this will accelerate things? What’s the timeline that we’re talking about?

[00:08:29.210] – Ronald Mueller

Right. One of the very helpful indicators that we also use in our market research is the investments into construction for manufacturing facilities. The US Statistic Bureau is sharing such type of data. And this has been at an all time high. I think it was around March last year. So there was a huge ramp up. Maybe fueled by the different acts that Joe Biden has created and has sided it, and the Biden administration have put up. But still, no matter where it came from, it is still, so to say, the investment that we have seen. And that’s been happening again, against around the mid of last year. Now, you can imagine those factories have to be built, they have to be finished, and then they have to be equipped. The buildings have to be finished, and then they have to be equipped. So we’re talking about one and a half, so 12 to 18 months of lag, time lag, until it actually it’s materializing. Assuming that the investors that have built that factories are really having still the money and the motivation to get it ramped up as soon as possible, which is normally the case.

[00:09:51.230]

In that sense, I think the impact we will see at against the end of ’25 in this, I say mid of ’25 to end ’25 and ’26. This is where we will see this impact of greenfield development and the brownfield, meaning the equipment of existing factories and the updating and the enhancement of the level of automation is something that’s still going on. You still have a fairly low unemployment rate in the US. You have a lack of skilled workers, and there is all benefit and all incentive to automate from just that aspect.

[00:10:42.540] – Josh Eastburn

Okay. That’s actually a shorter timeline than I thought you might say. 12 to 18 months, I feel like that feels fairly bullish. We are likely to see this aspect of economic benefit well within the time of Trump’s administration. On the other hand, we’re also talking about injections of foreign investment. You said that that’s likely to be attractive. I’m wondering on the other side of this, the impact of needing to reengineer supply chains that might be currently dependent on China. How is that decoupling from China likely to affect this shifting of investment to the US?

4. Decoupling from China and Shifting Global Supply Chains

[00:11:29.000] – Ronald Mueller

Yeah. So as a rule of thumb, you can assume that there are several trillions of dollars in manufacturing capacity that need to be relocated out of China for all the reasons of making supply chains more sustainable, making it less dependent on the mood of the governing party, on restrictions and what have you. That’s a huge manufacturing activity and investment that needs to happen. The big question is, who can benefit the most from what? There’s one type of product which can be produced in an extremely highly automated way. Semiconductors, for example, are one part of it, and they are high in value creation and in quality requirements. This type of product is something where it makes sense to relocate the production of those into the US territory. And so you can circumvent the terrfs. You can have some highly skilled labor available. There’s still a great education system with many bright people coming out in setting up those factories. And so you are less dependent on the cost of labor because you have such a highly automated process. But That’s something, low cost of labor, high quality requirement, and high value creation. That’s something which you can relocate out of China, where also the cost of labor has been skyrocketing over the last decade.

[00:13:16.430]

You can relocate those to the US and maybe even to Europe if you wanted. Then there is another type of product where price is more critical, where they do have maybe not such a high level of automation, where labor cost is still playing an important role. Here you have markets like Mexico, Eastern Europe, maybe Southeast Europe, where you can relocate manufacturing lines to because there you have the right mix of skilled people, low labor cost, and good quality standards. Then, so to say, there is a huge range of products which you can locate to other regions. Again, what I’m coming up here is a rule of thumb. There are exceptions and counter examples, many of them. But as a rule of thumb, you have some other aspects where you do not have such a high level of automation. You might not have such a high level of value creation, toys, or let’s say medium to low and consumer electronics. Here, the battle is India, Southeast Asia. Who gets the most of the cake? India, as you can imagine, has several Well, advantages. The language is one of them. The huge domestic market is another. I think I just read a statistics that said by 2030, India will be the number two in global consumption because of the growing per capita GDP, the growing wealth, and a huge 1.

[00:14:56.140]

4 billion people now, maybe 1. 56 in E30. It’s going through the route. Again, then you have these India and Southeast Asia regions where you can relocate all sorts of manufacturing that is still labour-intensive and doesn’t have maybe the super-highest quality requirements. Now, coming to counter examples, Apple, Samsung, and quite some others, they’re relocating the manufacturing out of China to India. So for mobile phones or PCs or such products. Again, you have a highly automated process there. You do not have such a high dependency on labor cost, but it’s just a very various text-wise and a very from the whole infrastructure. A low-cost manufacturing country. India is a low-cost manufacturing country, by all means, and this is still a great place to maximize your profit by producing there.

[00:15:55.180] – Josh Eastburn

This is something that’s already happening, and you’re saying these changes that are happening on the US side are likely to accelerate this process. Is that right?

[00:16:05.150] – Ronald Mueller

Yeah, definitely. Then another pain, certainly, is the whole Taiwan topic. Tsmc and so on, they are relocating to US techs or whatsoever. They are building new factories. But until they are operational, until they can catch up with the manufacturing capacity in Taiwan, it takes years. It’s not just a matter of one factory. It’s a matter of multiple of those in multiple regions. That’s a, say, a black swan thing that That’s on the horizon, and nobody knows when the trigger is pulled.

[00:16:50.570] – Josh Eastburn

How that’s going to play out. But we know that, speaking of timelines, some things we’ve been talking about, we’re looking at a year to two-year time horizon. Some of these other things, potentially globally impacting events, would roll out over a period of years, and hard to say how those might happen. In the meantime, while all of this is happening, US operators in the machine vision market, equipment builders in particular, I’m thinking about who are currently sourcing cheap components from China, what are they doing?

[00:17:25.500] – Ronald Mueller

We have several reports from manufacturers or from from vendors of machine vision equipment as well as from customers themselves to say users of machine vision components in the US are deliberately giving out the rule that they are willing to pay 10, 15, 20% even more for the bill of material if no Chinese-owned component is getting into their systems. So this, we call the ABC rule, all but China, that’s materializing. And again, also this is fueled by Trump. Reliability is the number one purchasing criteria, even beyond price in just so many scenarios and situations. Reliability is something that European, Canadian, and other providers can can guarantee, maybe better and more than others, and they have proven it over decades now. And so a loyalty of manufacturing machine vision components customers to their existing supply chain is extremely high. So as we know from our research, the Chinese player have a very hard time to get a major footprint in the North American and in the European markets because of that loyalty, so that in the US, at least, the commoditization and price erosion from Chinese counter offers is less critical.

[00:19:14.430] – Josh Eastburn

So This is not new. There’s already some structural incentives to operate that way, right? It sounds like the effect of Trump’s policies will just solidify that for a lot of manufacturers right now. Is that fair?

[00:19:29.450] – Ronald Mueller

Yeah, we Well, solidify, justify, enhance, enforce, however you want to put it.

[00:19:36.220] – Josh Eastburn

Yeah. Okay. That makes sense. Okay, interesting. We’ve largely been talking about North America. On the whole, this has sounded, I’d say, fairly positive. There’s lots of reasons why we might expect to see investment over the next couple of years. Sounds like manufacturers of machine vision systems are, in some sense, maybe prepared for of these changes, just based on their policies for where they source from. That sounds like this may not have necessarily a negative impact. They’ll be able to adapt. Any downsides that you see for the US market from these changes?

[00:20:14.620] – Ronald Mueller

Yeah, Well, the one impact, as I already mentioned, is a strong dollar is not helpful for US exports. On the other hand, we’ll see which countries are actually then able and following a strategy of counter-terror. Europe is very much dependent on the US in many regards, just let alone the defense side, let alone the technology of the IT sector. Where would we be without Google, Google Maps, Apple, Microsoft? Take Microsoft and Google away from Western Europe, it’s shot down, period. It’s shot down. Our The dependency from a technology perspective is, and again, from a defense and safety perspective is very high. Our means to negotiate are limited. Nonetheless, yes, there is still cutting equipment that is only available in Germany, let alone, for example, the optics from Zeiss that are the only ones basically available for the latest conductor equipment. Yeah, there is a dependence there, but it’s also on the other side, but it’s limited. It’s limited, and it’s getting a lot more rather.

[00:21:38.660] – Josh Eastburn

Okay. So this is an opportunity for Europe in some sense, but there’s a big question mark over how much they’ll be able to take advantage of this situation.

[00:21:48.620] – Ronald Mueller

Yeah, very much so. As I said, we see the sentiment, we see the detrimental effects on the European economy. Again, it holds specifically for Germany, but also basically for the rest of Europe in a good sense. We have the dependence on Russia when it comes to cheap energy. We were saving costs and state expenditures because we did not invest a lot in defense and in our own security infrastructure. We were dependent on China as buying our high-end equipment. All these three factors are falling apart. And all the the overhead, the state overhead, the subsidies in social studies, the subsidies in building up bureaucratic organizations and regulations, and the overhead in expanding the bureaucrats organization of the European Union and all the power and the the reach of the European Union far into national laws and even overriding national law to a large extent. So this is all a great luxury that has been built up over time. It’s adding jobs But who’s going to pay for that job? So the ratio between taxpayers and tax consumers got in a completely insane balance or imbalance, if you will, across the European states. This imbalance between taxpayers and tax consumers is not sustainable and it cannot work out in an overaging population where you have taxpayers not only paying for bureaucratic for the state organization, but also paying for retired people.

[00:23:47.390]

The editor-in-chief of a leading German Trade magazine for economics has put it in, I think from my perspective, in a very adequate way. He said, with Trump 2. 0, it can go two ways. Either it is a reform turbo for Europe and specifically for Germany. So either people are waking up and saying, Well, we cannot have a state that takes care of 5,000 different things. We need to narrow it down on the top 10 priorities that the state has to care about. So this is what we cannot afford. So either we use Trump 2. 0 as a wake-up call to this reform turbo, or it will be our grace diger. That’s a bit drastic, but I think it’s very accurate. It’s a very accurate perspective.

[00:24:39.360] – Josh Eastburn

The options are clear. Then maybe nothing really changes for Europe through this whole situation, unless, to the point that you just made, unless Europe decides to use this as the opportunity to free up cash for people. Is that right?

[00:24:52.240] – Ronald Mueller

Yeah, very much so.

5. The Future Outlook for Global Markets and Machine Vision

[00:24:57.150] – Josh Eastburn

Okay, very interesting. I’m wondering, too, at a global scale, Who do you think is most likely to benefit over the next four years of the Trump administration?

[00:25:07.860] – Ronald Mueller

One of the few winners maybe is the European defense industry. The magnitude of output that has to be generated in the next five years is a multiple of what the European defense industry is capable of today. Let Let it be ammunition, let it be weapons, let it be missiles, tanks, other vehicles, drones, airplanes, you name it. I think Germany has six marines, none of them is able to get afloat because they’re just rotted and they’re just not operational. There is a huge, and I’m talking about It’s up to a trillion of investments that need to go into this on an annual basis, even. So in five years. So again, as Europe, the European defense industry cannot catch up with this, we will still have for a longer time beneficial ramp-ups of defense equipment manufacturing in Korea, which is someone who can provide NATO-compatible equipment, and obviously also the US. So with Lockheed Martin, with GE, all the big players in that field are certainly also then benefiting to some extent. And Airbus in Europe, Airbus, Thales, their There are, you name it, Kraus, Maffie, Rheinmetal. There are tons of companies in this space which are really having a good time ahead for sure.

[00:26:53.570]

That’s the winner. On the other hand, I was asked the question also, I think yesterday was in another interview, said like, Okay, which will be on the global scale? Which will be the winner? When you look ahead for the next five years, we have a booming population in Southeast Asia and India. We have an increasing wealth level in these countries. As I said, by 2030, India will be the second largest consumer in the world. So all these billions of people, they need to eat, they need to drink, they need to wash, they need to take care of their daily lives, and they need wants to consume. So everything that is catering to that consumption is having a good time ahead. Food production, food processing, just the smart farming, chemicals, pharma, all of these, let’s say, traditional non-syptical goods. This is a great time ahead for the UNBIK, and that’s valid for the next 5 years to 20 years. So Sure. This is a fairly state bet. Again, the question will be, do we manage to provide the manufacturers of those goods with equipment that is cost-effective enough and that is easy to use enough so that it can actually be applied in the automation of such production and the logistics, intro-logistics and extra-logistics of such good.

[00:28:31.550]

Here, I think the whole of machine vision, the machine vision industry, can do a better job. There’s so many things that can be automated. I know what I want to inspect. I know how big the device is that I want to inspect. I know what the level of detail I want to recognize. And with some logic, you can instantly calculate what lens, what image sensor, what type of camera, what transmission bandwidth, what software algorithms you use, and you’re done. So this support and automation of the development of vision systems and bringing down the price of the bill of material in that front, this is the game changer. And this is, so to say, everybody who has mastered that part has a very good potential to win the Southeast Asia and Indian markets.

[00:29:33.660] – Josh Eastburn

That’s very interesting because now I’m thinking back, we’ve talked about the situation as it’s likely to develop in the US, in Europe. And now I’m thinking, it sounds like you’re talking about Southeast Asia and India as this future honeypot that’s going to be very attractive to a lot of foreign investment, considering that at least India in particular may not have local suppliers that are going to fill all these needs for automation, for production in general. Meanwhile, the US is going to be a little bit of a mixed situation in terms of being able to supply there if they’re expensive. Perhaps then that’s other Asian suppliers that are best positioned to take advantage of that opportunity. If Europe is also a little bit tied up with its own issues, am I reading the situation correctly?

[00:30:27.350] – Ronald Mueller

Yeah, you’re right. Again, in India and Southeast Asia, you have… These are, again, the battlegrounds between the big world powers, US and China. Both of them are trying to get as much as possible a footprint in these areas. The company or the country, the Malaysia, Indonesia, and so on, they are very smart. They know exactly what’s going on. They play these two powers against each other. They say, Well, if you don’t give me protection for this, I’ll go to the other guys, to the Chinese, and I will get it from them, and vice versa. They’re very opportunistic in that sense. It’s all about, as I said, discussing or let’s say making the trade off which part of their economy and which part of their funding and their investments do they get from which side? That’s how they play it.

[00:31:28.980] – Josh Eastburn

Yeah. Fascinating. Well, this has been fantastic. You’re such a wealth of information on this. I’m learning a lot, and I think our listeners will learn a lot. I guess two questions to wrap up. For those who are listening to this who are really interested in understanding the situation more, where would you suggest they go to learn more about this evolving economics of the machine vision industry?

[00:31:50.780] – Ronald Mueller

Yeah, our mission is to support the global machine vision industry with its growth. Our mission, accordingly, is to help players in the industry to do the right things. Therefore, we are having our newsletter that is called Vision Crunch that is coming out regularly. Obviously, what we publish on a free-of-charge level, so to say, is just the surface. Again, we would be more than happy to discuss with automation players, machine vision players who want to make sure that they can keep up their business in the upcoming years, no matter where where they are currently, or players who want to expand into Southeast Asia, into India and that region. That’s a challenge by its own, which we are happy to help with our local partners. Everyone who is interested in growth is happy to reach out to me and to my colleagues.

6. How to contact Ronald Mueller and Josh

[00:32:50.360] – Josh Eastburn

Where can people find you online?

[00:32:53.620] – Ronald Mueller

Well, our website is markets. Visions. Also further information about me and us, you can very well find on LinkedIn. We are quite active there. It’s always with quite some delay compared to our media partners and our subscribers. We publish information there. But yeah, that’s certainly something where you can make sure that you don’t miss the big stories.

[00:33:15.890] – Josh Eastburn

Fantastic.

[00:33:17.000] – Ronald Mueller

Sure.

[00:33:20.310] – Josh Eastburn

Okay, that’s our episode for today. A big thanks to Ronald Mulder and Vision Markets. If you’d like to read Ron’s original article, visit mvpromedia.com and take a look at the January 2025 issue. Then drop us a comment on LinkedIn. We’d love to hear your take on the future of machine vision. Until next month, I’m Josh Eastburn for MV Pro Media. Thanks for listening.