Latest news with #BringItHome
Yahoo
28-05-2025
- Business
- Yahoo
Bonus depreciation for manufacturing plants now!
President Donald Trump's 'big, beautiful' budget bill could dramatically accelerate investments in domestic manufacturing by allowing companies to fully depreciate their production facilities in the first year, but the bill is under threat in Congress from Republicans concerned about its impact on the federal debt. One of the keys of the bill is its revolutionary way of applying bonus depreciation to the construction of entire buildings involved in production and manufacturing, not just upgrades or new equipment – it's tailored to boost reshoring and industrial production. This is JP Hampstead, co-host with Craig Fuller of the Bring It Home podcast. Welcome to the 24th edition of our newsletter, which is all about the current federal budget reconciliation bill and how it could affect reindustrialization. Whoever coined the term 'budget reconciliation,' in crafting the 1974 Budget Reform Act, deserves an award for articulating a paradox that accurately depicts the current process in Congress. The paradox of budget reconciliation is that budgets are contentious, fluid and divisive moving targets, whereas 'reconciliation' means coming together on a mutually agreeable, consensus outcome. The two terms collide when fiscal reality, which has chased the tail of all members' worthy goals and projects, catches up and forces them to limit their tension between fiscal discipline and political priorities has never been more apparent than in the current congressional debates over Trump's budget reconciliation bill – what he has called 'one big, beautiful bill.' As lawmakers wrestle with competing priorities, the fundamental challenge remains: how to balance ambitious policy goals with the sobering reality of America's fiscal situation. Mercedes-Benz plant in Tuscaloosa County, Alabama. (Photo: Mercedes-Benz) The GOP's debt concerns The fiscal impact of Trump's 'big, beautiful bill' has become a significant political concern among Republican lawmakers who have made little progress toward offsetting the $3 trillion projected cost of the legislation. Some GOP senators fear the bill's failure to rein in federal spending in a substantial way over the next decade is fueling jitters in the bond market, where soft demand for U.S. debt has caused yields to climb in recent Thomas Massie, R-Ky., one of only two Republicans to vote against the bill in the House, called it a 'debt bomb ticking,' warning it 'dramatically increases deficits in the near term' while promising fiscal reforms 'five years from now.' Sen. Rick Scott, R-Fla., echoed these concerns, citing rising interest rates: 'I think we're having trouble selling our long bonds already.' The 30-year U.S. Treasury yield rose to 5.15% after the House passed the massive package, its highest level since October 2023. Christopher Waller, a member of the Federal Reserve board of governors, said 'markets are looking for a little more fiscal discipline' and called yearly deficits of more than $2 trillion 'not sustainable.' Sen. Rand Paul, R-Ky., has been particularly vocal, warning colleagues that Trump and Republican lawmakers will 'wholly own' future federal deficits if they enact the legislation without making significant changes to offset costs. 'The anticipated deficits per year now will be $2 trillion a year for the next two years,' Paul noted, adding that 'these will be GOP spending bills, GOP deficits, and there is no change in the direction of the country.' Defense, research and 100% depreciation Despite these concerns, the reconciliation bill contains several provisions aimed at stimulating economic growth, particularly in the manufacturing and defense sectors. The bill would provide a $150 billion boost to defense spending, of which $24.7 billion is designated for construction of the 'Golden Dome' missile defense shield proposed by the president in January. On the tax front, the bill would reintroduce tax rules allowing companies to fully deduct domestic research costs in the year they occurred, reversing a rule introduced in the 2017 Tax Cuts and Jobs Act that requires companies to spread the deduction of R&D costs over five years. The National Association of Manufacturers has praised the bill, with President and CEO Jay Timmons stating it 'brings us closer to the vision of a 15% effective tax rate for manufacturers.' The bill also includes a qualified production property deduction that allows taxpayers to claim a 100% depreciation allowance for property used in manufacturing, production or refining. This provision effectively enables immediate expensing of new buildings or plants, which tax experts view as Ways and Means' interpretation of Trump's promise to reduce corporate tax rates for companies that manufacture domestically. Additionally, the bill addresses three major provisions from the Tax Cuts and Jobs Act: It would increase the bonus depreciation rate to 100% for qualifying property placed in service between January 2025 and January 2030; temporarily suspend the requirement to capitalize domestic research and experimentation expenses for tax years 2025-2029; and reinstate the more favorable limitation on earnings before interest, taxes, depreciation and amortization for business interest deductions during the same considerations Senate Majority Leader John Thune, R-S.D., has acknowledged that members of the Senate GOP conference will push for more deficit reduction in the bill. However, many of the proposals to cut spending already face opposition from other Republican senators, creating a significant challenge for passage. Sens. Susan Collins, R-Maine, Lisa Murkowski, R-Alaska, Josh Hawley, R-Mo., and Jerry Moran, R-Kan., have warned against Medicaid reforms that would reduce benefits or threaten the finances of rural hospitals. Similarly, Murkowski, Moran and Sens. Thom Tillis, R-N.C., and John Curtis, R-Utah, have expressed concerns about the sudden repeal of renewable energy tax breaks and incentives, arguing they would destabilize the clean energy industry and potentially lead to job losses. With a 53-seat majority, Senate Republicans can only afford to lose three votes and still pass the bill. This narrow margin gives any group of four senators significant leverage to demand changes, creating a delicate balancing act for leadership. The paradox of budget reconciliation continues to play out in Congress, with lawmakers struggling to reconcile ambitious policy goals with fiscal constraints. The much-sought golden age of prosperity through prudent fiscal management remains elusive, as political pressures continually push against meaningful deficit reduction. As Don Wolfensberger, a 28-year congressional staff veteran, observed, 'Deficits will continue to climb, government spending will continue to grow, and false savings will continue to be fabricated. The paradox of budgeting is that its shifting parameters will never be reconciled with utopian grand fixes.' The stark reality is that entitlement benefits, where the real money is, remain politically untouchable. 'Chairman Smith and the Ways and Means Committee are delivering what manufacturers in America have called for and what our industry needs to compete and win. The 2017 tax reforms were rocket fuel for manufacturers – driving job growth, higher wages and investment in communities. This bill brings us closer to the vision of a 15% effective tax rate for manufacturers that President Trump and I discussed in 2016.' – National Association of Manufacturers President and CEO Jay Timmons, in a May 12 press release Kraft Heinz confirms $3B investment in US manufacturing Kraft Heinz will spend $3 billion on its U.S. manufacturing facilities, the company confirmed to Food Dive. It's the largest investment in its plants in decades. Pedro Navio, president of Kraft Heinz's North America operations, told Reuters recently that planned investments could add 3,500 employees to the Lunchables producer's workforce. Part of Kraft Heinz's investment includes a $400 million distribution center in DeKalb, Illinois, that is set to create 60 jobs, a transaction first announced in 2023. Energy company Carrier to invest additional $1 billion in US manufacturing Carrier Global, a provider of intelligent climate and energy solutions, has revealed plans to invest an additional $1 billion over five years in U.S. manufacturing, innovation and workforce expansion. Carrier says the investment is 'incremental to its ongoing commitments to American operations' and is expected to create 4,000 highly skilled jobs in R&D, manufacturing and field service. US industrial production stalled in April U.S. industrial output stalled in April after contracting a month earlier, the Federal Reserve said Thursday, with a decline in manufacturing counteracted by growth in electricity and gas production. The data covers the period of time when Trump imposed his sweeping 'Liberation Day' tariffs, which have lifted levies substantially above their historical average for most countries. U.S. industrial production was 'little changed' last month after contracting 0.3% in March, the Fed said in a statement. The post Bonus depreciation for manufacturing plants now! appeared first on FreightWaves. Sign in to access your portfolio
Ya Libnan
15-05-2025
- Business
- Ya Libnan
Time to Bring iPhone Manufacturing Back to America, Op-Ed
Photo: Steve Jobs the champion of the iPhone concept By : Ya Libnan – Op-Ed series : 'Bring It Home: Rebuilding America's Manufacturing Power' Key Points : Apple — the symbolic heart of American innovation that builds abroad. President Donald Trump is once again raising the right question: Why isn't Apple — one of the richest and most powerful companies in the world — making its iPhones in the United States? Apple has long claimed that moving iPhone manufacturing to the U.S. is impractical or too costly. But that argument doesn't hold water. What's really at stake is profit margins — not practicality. And if America is serious about rebuilding its economic backbone, it's time to stop making excuses and start making things again. Some quoted Apple as saying that it takes around 20 hours to assemble an iPhone — but that number includes automated processes. The real manual labor? It takes less than one hour of human hands to put together an iPhone. Even at American wages, that labor would only add $20 to $40 to the cost of each device. That's a small price to pay for rebuilding an industry, restoring pride in American craftsmanship, and giving jobs to American workers. For decades, the U.S. sent its manufacturing overseas, chasing cheap labor and bigger profits. In the process, we lost factories, skills, and the dignity of building things with our own hands. Whole towns were hollowed out. Generations grew up without ever seeing what a thriving local factory looks like. Apple is a symbol of American innovation. But what good is innovation if it's always built somewhere else? It's time to match great ideas with great American manufacturing — and to bring back the jobs, training, and supply chains that made the U.S. an industrial powerhouse. This isn't just about Apple — it's about the country's long-term economic strength. A nation that can't make its own goods will always be at the mercy of those who can. The more we outsource, the more we lose our leverage, our independence, and our ability to shape our future. America should not just be a consumer of high-tech products — it should be the maker of them. If we don't control the production, we don't control the future. Apple benefits enormously from being an American company. It enjoys strong legal protections, tax advantages, and a massive U.S. customer base. Yet it gives very little back in terms of jobs or industrial investment at home. That's not just a missed opportunity — it's a moral failure. If Apple sells iPhones to American consumers, it should build them with American workers. The company can afford it. The country needs it. And the message it would send — that America can make world-class products again — is priceless. President Trump is right to push for American-made iPhones. This is about more than one company — it's about rebuilding a national culture of production, pride, and independence. Let Apple lead by example. Let America remember how to build. It's time to turn 'Designed in California' into 'Designed and Made in the USA.'
Yahoo
24-04-2025
- Business
- Yahoo
Design flaws undercut law to bring chip manufacturing back to US, expert says
On the most recent Bring It Home Podcast, host JP Hampstead spoke with Julius Krein, founder and editor-in-chief of American Affairs, about U.S. industrial policy post-CHIPS Act. The CHIPS and Science Act of 2022 aims to bring microchip manufacturing back to the U.S. after several decades of companies offshoring the technology. According to a report by the Council on Foreign Relations – a nonpartisan think tank headquartered in New York – the U.S. produced 40% of the world's semiconductor supply in 1990. Today, the U.S. produces only 12% as Taiwan has ramped up to over 60% of the world's supply of semiconductors. Krein dove into the historical context, challenges and prospects of America's industrial strategy. He described U.S. industrial policy as targeted interventions aimed at boosting specific sectors to improve economic competitiveness and national security. He also critiqued traditional views that often portray such policies as economic externality management, arguing instead that U.S. industrial policy should strategically lower the cost of capital for essential projects to boost growth. Krein said the CHIPS Act has had its limitations, pointing out its short-term focus and lack of a mechanism for ongoing policy adjustments. He said that mechanism would be vital for the long-term competitiveness of the U.S. semiconductor industry. 'I think the CHIPS Act was necessary,' Krein said. 'But in sort of design and execution, I think it had two problems: one in terms of policy design, one in terms of more framing and rhetoric.' 'I think it's a critical sector, but I'd like to think or at least hope that we could do both a lot better on policy design as well as kind of building a larger framework and ecosystem for all of these projects,' he continued. Other headlines discussed in this episode included: Recent announcements of large investments by tech conglomerates in the U.S., including Taiwan Semiconductor Manufacturing Co.'s commitment to extending its semiconductor manufacturing operations with a $100 billion investment. Apple's intention to expand its U.S. manufacturing footprint with a $500 billion investment, focusing on enhancing its supply network. The Stargate project, a joint venture by OpenAI, Softbank and Oracle aimed at developing AI infrastructure with a $500 billion pledge, reflecting broader trends toward investing in AI as a catalyst for new business models. Bring It Home dives into emerging industry trends and the push for reindustrialization in North America. The podcast is available on YouTube, Spotify and Apple Podcasts. The post Design flaws undercut law to bring chip manufacturing back to US, expert says appeared first on FreightWaves. Sign in to access your portfolio
Yahoo
16-04-2025
- Business
- Yahoo
Can the US learn from China?
By every metric, China dominates global manufacturing. But how did this country, which was backward and impoverished, with a GDP per capita under $1,000 as late as 1999, transform itself into an industrial powerhouse? And what can other nations, particularly the United States, learn from China's manufacturing success story? This is JP Hampstead, co-host with Craig Fuller of the Bring It Home podcast. Welcome to the 21st edition of our newsletter, where we ask how China did it and what the U.S. can and can't take from the Chinese example. To understand the rise of Chinese manufacturing, we need to go back. In the late 1970s, China began opening up its economy under Deng Xiaoping's leadership. This marked a significant shift from the country's previously closed, centrally planned system to a more market-oriented approach. The timing was perfect: It was the high-water mark of union membership in the U.S., Western companies were seeking ways to reduce production costs, and China offered an abundance of low-cost labor. Initially, China's role in global manufacturing was primarily as a low-cost producer of simple, labor-intensive goods. However, over the decades, the country has transformed its manufacturing capabilities, moving up the value chain to produce increasingly sophisticated products. Today, China is not just a hub for textiles and toys but also for high-tech electronics, automotive parts and advanced aspects of Chinese culture, institutions and public policies have contributed to this manufacturing success. First, there's the cultural emphasis on hard work and collective achievement. The Chinese workforce is known for its diligence and willingness to put in long hours; alternatively, one could speak of the Chinese people's pain tolerance and low expectations for quality of life. Top-down industrial policies from Beijing have been instrumental in China's manufacturing rise. The Chinese government has consistently prioritized industrial development, offering various incentives to attract foreign investment and technology transfer. These include tax breaks, subsidies and the establishment of special economic zones. The government has also invested heavily in infrastructure – including $153 billion for domestic ports between 2012 and 2019 alone – creating an environment conducive to large-scale manufacturing operations. Another key factor is China's vast and well-developed supply chain ecosystem. The concentration of suppliers, assemblers and logistics providers in manufacturing clusters allows for rapid prototyping, efficient production and quick turnaround times. This ecosystem is particularly evident in regions like Shenzhen, which has become a global hub for electronics manufacturing. However, it's important to note that China's manufacturing success hasn't come without high costs. Issues such as intellectual property infringement, labor rights concerns and environmental degradation have been persistent problems. Beijing is still choked with vast what can the United States learn from China? While some aspects of China's approach may not be replicable or desirable in the U.S. context, there are certainly lessons to be drawn. First, the importance of a coherent, long-term industrial policy cannot be overstated. The U.S. could benefit from a more strategic approach to supporting its manufacturing sector, including targeted investments in key industries and technologies. Second, the U.S. could take cues from China's emphasis on vocational education and training. Strengthening partnerships between educational institutions and industry could help create a workforce better aligned with the needs of modern manufacturing. Third, the development of manufacturing ecosystems or clusters, similar to those in China, could enhance efficiency and innovation in U.S. manufacturing. This might involve incentives for co-location of suppliers and manufacturers in specific regions, or even the creation of special economic zones. Balaji Srinivasan recently tweeted in support of a 'special Elon zone' without taxes or regulations around SpaceX's Starbase in Texas. But the U.S. can't simply replicate China's formula for success. Our federal government is divided and often at cross-purposes with itself, making ambitious policies difficult to achieve; our hard-tech sector often bears the cost of R&D that benefits the entire world; American workers have high expectations for their quality of life. So the U.S. must forge its own path to manufacturing competitiveness. While China's manufacturing success story offers valuable insights, the key for the U.S. lies in adapting relevant lessons to its own unique context and perhaps a strategy that leans into innovation rather than sheer scale, automation rather than cheap labor, critical machines rather than retail goods, and sustainable partnerships between labor and management. 'China's door of opening up will not be closed but will only open wider, and our business environment will only get better.'– China Vice Premier Ding Xuexiang at Davos 2025 Nvidia to Manufacture American-Made AI Supercomputers in US for First TimeWithin the next four years, Nvidia plans to produce up to half a trillion dollars of AI infrastructure in the United States through partnerships with TSMC, Foxconn, Wistron, Amkor and SPIL. These world-leading companies are deepening their partnership with Nvidia, growing their businesses while expanding their global footprint and hardening supply chain resilience. Novartis plans to invest $23 billion in US sites as Trump renews drug tariff threats Swiss drugmaker Novartis said on Thursday it plans to spend $23 billion to build and expand 10 facilities in the U.S., as it grapples with renewed threats of drug import duties from the Trump administration. Novartis said it plans to build six new manufacturing plants, some of which will make raw pharmaceutical ingredients, as well as a new R&D site in San Diego. LVMH mulls moving more manufacturing to the US amid continuing tariff chaos On LVMH's first-quarter 2025 earnings call on Monday, the French luxury giant revealed slightly lowered sales while highlighting recent successes like the debut of Sarah Burton designing for Givenchy and Tag Heuer's return to sponsoring Formula 1. But the question on every analyst's mind was: How is LVMH feeling about tariffs? President Donald Trump's rollout of disruptive tariffs has been causing headaches for fashion brands for weeks. LVMH is a leader in the fashion space, and CEO Bernard Arnault has close ties to Trump. The company's reaction to the tariff rollout could serve as an indicator for the rest of the industry of just how dire things could be. The post Can the US learn from China? appeared first on FreightWaves.
Yahoo
08-04-2025
- Business
- Yahoo
Trade policy changes alone won't bring manufacturing back
President Donald Trump has implemented a reciprocal tariff scheme that raises tariffs on imports from other countries that place tariffs on U.S. goods. The stated goal is to level the playing field for American manufacturers and bring factories and jobs back to the United States. The plan targeted industries like steel, aluminum, automobiles and consumer electronics – areas where the U.S. has seen significant manufacturing job losses in recent decades. But it also affected commodities like cocoa and bananas, which are unlikely to be grown in the U.S. in significant numbers, suggesting that at least some of the tariffs are intended to be used as bargaining chips by the administration to get movement on other issues. Because the tariffs have been imposed for different reasons depending on the trading partner and commodity, it's difficult to talk about their effects, intended or otherwise, as a whole. This is JP Hampstead, co-host of the Bring It Home podcast with Craig Fuller. Welcome to the 20th edition of our newsletter, which puts trade policy in the broader context of a comprehensive industrial policy. While tariffs can provide some short-term protection for domestic industries, I believe they're insufficient on their own to reverse the long-term decline in U.S. manufacturing. The reality is far more complex, as outlined in a recent article on X by entrepreneur and Bring It Home podcast guest Molson explains that, while labor costs are a significant factor, they are not the only reason manufacturing has moved overseas. The United States faces several key challenges in reshoring manufacturing. First, there is a considerable lack of manufacturing infrastructure and domestic supplier networks. Over the years, the U.S. has also experienced a loss of essential manufacturing knowledge and skills within its workforce, further complicating efforts to bring production back. Additionally, the costs associated with energy, transportation and regulatory compliance in the U.S. are comparatively high, posing another barrier. Hart also notes that automation is reducing the number of manufacturing jobs even as output increases. So even if production returns, it may not bring back a proportional number of jobs. Personally, I think the 'if the factories come back, they'll be full of robots anyway' argument is overblown. Yes, automotive assembly workers are approximately five times as productive today as they were in the 1950s. The largest automotive plant in the United States by number of assembly workers is Toyota in Georgetown, Kentucky, which employs approximately 9,500 people. It's a much smaller scale in people terms than Ford's River Rouge plant, which employed in excess of 100,000 in the 1930s, but anyone who says 9,500 manufacturing jobs aren't worth pursuing because the numbers are too small is disconnected from reality. It turns out that the median household income in Georgetown is about $78,000 per year, 25% higher than the rest of To truly revitalize American manufacturing, tariffs must be part of a broader, more robust industrial policy. This strategy should encompass several critical areas. Regulatory reform is essential to streamline permitting processes, environmental reviews and other regulations, which would reduce compliance costs and encourage new manufacturing investments. Tax policy should aim to provide incentives for research and development, capital investments in cutting-edge equipment and facilities, and workforce training. This could involve expanding the R&D tax credit and allowing for the immediate expensing of capital investments. Infrastructure investment is another cornerstone, as modernizing transportation networks, energy grids and broadband is necessary to lower logistics costs and enhance competitiveness. Additionally, export promotion efforts should be strengthened by providing resources and support to help small and medium-size manufacturers enter global markets. Strategic industry support is vital in identifying and nurturing industries of the future, such as semiconductors, biotechnology, clean energy and advanced materials. Lastly, implementing 'Buy American' policies through federal procurement can help create markets for domestic manufacturers, particularly in critical industries. This comprehensive approach addresses the root causes of manufacturing decline, fostering an environment where American companies can innovate, boost productivity and generate high-quality jobs. While tariffs can play a role in protecting strategic industries, they are just one tool in what needs to be a much larger toolbox. Without accompanying investments and reforms, tariffs alone risk raising consumer prices (or harshly suppressing demand) without generating sustainable gains in domestic manufacturing. ''Liberation Day' has very likely liberated the US and the WTO from each other for good. Nonetheless, it would be unwise to dismiss these visions. They represent the intellectualization of two ideas that resonate deeply with American voters: that past decades' trade and security policies have been net negatives for Americans, and that they ought instead to produce tangible daily benefits. The longer these ideas are dangled in front of voters, the less likely it is we will see a return to a system in which the US plays by any trade rules at all.' – Heather Hurlburt, associate fellow, U.S. and the Americas Programme, Chatham House A map of automotive production in the United tally: J&J plans $55 billion investment to expand U.S. manufacturing Johnson & Johnson will spend $55 billion in the U.S. over the next four years on manufacturing, research and technology investments, the drug giant said Friday. The company breaks ground Friday on a manufacturing facility in Wilson, North Carolina, to make cancer and other medicines. AI Meets Manufacturing – Nearshore Launches Sourcing Marketplace of Suppliers across the US, Latin America, and Europe Nearshore officially unveiled its AI-powered manufacturing marketplace, connecting businesses with a network of over 2,200 factories across the U.S., Latin America and Europe. Nearshore offers an ecosystem of manufacturing partners across industries such as apparel, electronics and packaging. Iron Prairie Ventures Launches Fund to Capitalize on America's Reindustrialization Iron Prairie Ventures announced it has raised a $15 million fund focused on pre-seed and seed-stage investments in startups fueling the industrial sector's digital transformation. The fund will back companies developing innovative solutions across the construction, manufacturing, infrastructure, logistics and supply chain sectors. The post Trade policy changes alone won't bring manufacturing back appeared first on FreightWaves. Sign in to access your portfolio
