Latest news with #NationalAssociationofManufacturers
Yahoo
4 days ago
- Business
- Yahoo
Trump wants a manufacturing boom. The industry is buckling.
President Donald Trump is vowing to spark a manufacturing boom with tariffs to protect American workers and industry. So far, it's manufacturers that have borne the brunt of the pain. The president's surprise decision to raise tariffs on imported steel and aluminum to 50 percent will hit domestic manufacturing just as a new report shows the industry is already contracting. Uncertainty about where tariff rates will ultimately land — or where they'll be applied — has forced businesses to make hard decisions that could cut into both profits and hiring. And a leading trade group on Thursday called on Trump to give the companies a break on the tariffs. 'For a president who is intent on building U.S. manufacturing, the tariff strategy he's laid out is remarkably short-sighted,' said Gordon Hanson, a Harvard Kennedy School professor whose groundbreaking 2016 research work, 'The China Shock,' was among the first to sound the alarm about the threat to American industry. 'It fails to recognize what modern supply chains look like.' 'Even if you're intent on reshoring parts of manufacturing, you can't do it all,' he said. 'Steel and aluminum are part of that.' If Trump's tariffs fail to result in a manufacturing renaissance — a central focus of his presidential campaign — it could weaken the prospects of a GOP coalition that's increasingly reliant on working-class voters who supported his protectionist trade policies. But as unanticipated tariffs continue to drive up input costs for companies that need steel and aluminum for production, the warning signs emanating from manufacturers are getting louder. An index published this week by the Institute for Supply Management, which tracks manufacturing, slipped for the third straight month in May as companies made plans to scale back production. A quarterly survey conducted by the National Association of Manufacturers reported the steepest drop in optimism since the height of the Covid-19 pandemic, with trade uncertainty and raw material costs cited as top concerns. Federal Reserve data this month reported weaker manufacturing output. The manufacturers' association on Thursday urged Trump to develop a 'speed pass' that would allow companies to avoid costly new duties on imported raw materials and components that are essential to U.S. producers. 'The steel and aluminum tariffs are almost custom-made to hurt American manufacturing,' said Ernie Tedeschi, a former top Biden administration economist who's now with the Yale Budget Lab. Trump and top administration officials argue that tariffs will encourage investment in domestic manufacturers, which should lead to better-paying jobs, a more resilient economy and more secure supply chains. Exports climbed in April as the president's tariffs took hold, which contributed to an eye-popping decline in the U.S. trade deficit. Indeed, the overall economy remains solid, and businesses are continuing to hire, according to Friday's jobs report for May. Despite the trade headwinds, employment in the manufacturing sector has remained steady since Trump took office. 'As the president says, if you don't make steel, you can't fight a war. He's protecting that industry and bringing it back,' Commerce Secretary Howard Lutnick told Senate lawmakers this week. 'You're going to see more steel and aluminum furnaces and mills in the history of this country get built over the next three years.' The White House did not respond to a request for comment. Trump welcomed the monthly jobs report, posting on Truth Social:'AMERICA IS HOT! SIX MONTHS AGO IT WAS COLD AS ICE! BORDER IS CLOSED, PRICES ARE DOWN. WAGES ARE UP!' Still, domestic manufacturers who rely on international supply chains for critical steel and aluminum inputs will face tough choices if they want to maintain their profits while keeping output steady. 'Higher costs are expected. Higher input prices. The question is, what do you do with those costs? How much can you pass along to the consumer? How much can you negotiate with your suppliers?' said Andrew Siciliano, a partner at KPMG who leads the consulting firm's trade and customs practice. The challenges posed by the increase in steel and aluminum tariffs are particularly acute because it's far from clear whether domestic suppliers will be able to meet the demands of domestic manufacturers. Almost half the aluminum used in the U.S. last year came from foreign sources, according to federal data, and roughly a quarter of all steel is imported. Either way, 'input costs are going to be higher,' Siciliano said. 'If they pass it on, it could affect demand. If they don't pass it on, it could affect profitability.' That isn't to say manufacturers won't benefit from tariffs in the long term. To the extent that Trump's overall tariff regime limits imports, U.S.-based industrial production could expand to address unmet demand. The Budget Lab's analysis of Trump's tariff regime — which includes the 50 percent tariffs on steel and aluminum — projects that manufacturing output could grow by 1.3 percent over the next five years if existing import duties are left in place. But Tedeschi cautioned that growth may exclude segments like electronic and semiconductor production — which tend to generate higher incomes for workers. Meanwhile, output in other sectors like construction or agriculture would likely contract. Julia Coronado, founder of MacroPolicy Perspectives, also said the flurry of new import duties may prompt some manufacturers to actually move their manufacturing facilities offshore rather than subject their supply chains and production processes to multiple tariffs. 'If I have to assemble a bunch of parts and inputs, why don't I just don't do that on the Canadian or Mexican side of the border and then pay the tariff on the final good?' she said. An even bigger challenge may involve finding and training workers who can staff up any facilities that reshore. Most Americans work in the service sector and, to the extent tariffs lead to reshoring, those facilities will likely rely heavily on automation, according to economists at the Bank of America Institute. Finding qualified workers in the U.S. is either too difficult or too expensive. 'Whatever manufacturing production comes back to the U.S. will require far fewer jobs than 30 or 40 years ago,' Hanson said. 'It's just the way the world has gone."
Politico
4 days ago
- Business
- Politico
Trump wants a manufacturing boom. The industry is buckling.
President Donald Trump is vowing to spark a manufacturing boom with tariffs to protect American workers and industry. So far, it's manufacturers that have borne the brunt of the pain. The president's surprise decision to raise tariffs on imported steel and aluminum to 50 percent will hit domestic manufacturing just as a new report shows the industry is already contracting. Uncertainty about where tariff rates will ultimately land — or where they'll be applied — has forced businesses to make hard decisions that could cut into both profits and hiring. And a leading trade group on Thursday called on Trump to give the companies a break on the tariffs. 'For a president who is intent on building U.S. manufacturing, the tariff strategy he's laid out is remarkably short-sighted,' said Gordon Hanson, a Harvard Kennedy School professor whose groundbreaking 2016 research work, 'The China Shock,' was among the first to sound the alarm about the threat to American industry. 'It fails to recognize what modern supply chains look like.' 'Even if you're intent on reshoring parts of manufacturing, you can't do it all,' he said. 'Steel and aluminum are part of that.' If Trump's tariffs fail to result in a manufacturing renaissance — a central focus of his presidential campaign — it could weaken the prospects of a GOP coalition that's increasingly reliant on working-class voters who supported his protectionist trade policies. But as unanticipated tariffs continue to drive up input costs for companies that need steel and aluminum for production, the warning signs emanating from manufacturers are getting louder. An index published this week by the Institute for Supply Management, which tracks manufacturing, slipped for the third straight month in May as companies made plans to scale back production. A quarterly survey conducted by the National Association of Manufacturers reported the steepest drop in optimism since the height of the Covid-19 pandemic, with trade uncertainty and raw material costs cited as top concerns. Federal Reserve data this month reported weaker manufacturing output. The manufacturers' association on Thursday urged Trump to develop a 'speed pass' that would allow companies to avoid costly new duties on imported raw materials and components that are essential to U.S. producers. 'The steel and aluminum tariffs are almost custom-made to hurt American manufacturing,' said Ernie Tedeschi, a former top Biden administration economist who's now with the Yale Budget Lab. Trump and top administration officials argue that tariffs will encourage investment in domestic manufacturers, which should lead to better-paying jobs, a more resilient economy and more secure supply chains. Exports climbed in April as the president's tariffs took hold, which contributed to an eye-popping decline in the U.S. trade deficit. Indeed, the overall economy remains solid, and businesses are continuing to hire, according to Friday's jobs report for May. Despite the trade headwinds, employment in the manufacturing sector has remained steady since Trump took office. 'As the president says, if you don't make steel, you can't fight a war. He's protecting that industry and bringing it back,' Commerce Secretary Howard Lutnick told Senate lawmakers this week. 'You're going to see more steel and aluminum furnaces and mills in the history of this country get built over the next three years.' The White House did not respond to a request for comment. Trump welcomed the monthly jobs report, posting on Truth Social: 'AMERICA IS HOT! SIX MONTHS AGO IT WAS COLD AS ICE! BORDER IS CLOSED, PRICES ARE DOWN. WAGES ARE UP!' Still, domestic manufacturers who rely on international supply chains for critical steel and aluminum inputs will face tough choices if they want to maintain their profits while keeping output steady. 'Higher costs are expected. Higher input prices. The question is, what do you do with those costs? How much can you pass along to the consumer? How much can you negotiate with your suppliers?' said Andrew Siciliano, a partner at KPMG who leads the consulting firm's trade and customs practice. The challenges posed by the increase in steel and aluminum tariffs are particularly acute because it's far from clear whether domestic suppliers will be able to meet the demands of domestic manufacturers. Almost half the aluminum used in the U.S. last year came from foreign sources, according to federal data, and roughly a quarter of all steel is imported. Either way, 'input costs are going to be higher,' Siciliano said. 'If they pass it on, it could affect demand. If they don't pass it on, it could affect profitability.' That isn't to say manufacturers won't benefit from tariffs in the long term. To the extent that Trump's overall tariff regime limits imports, U.S.-based industrial production could expand to address unmet demand. The Budget Lab's analysis of Trump's tariff regime — which includes the 50 percent tariffs on steel and aluminum — projects that manufacturing output could grow by 1.3 percent over the next five years if existing import duties are left in place. But Tedeschi cautioned that growth may exclude segments like electronic and semiconductor production — which tend to generate higher incomes for workers. Meanwhile, output in other sectors like construction or agriculture would likely contract. Julia Coronado, founder of MacroPolicy Perspectives, also said the flurry of new import duties may prompt some manufacturers to actually move their manufacturing facilities offshore rather than subject their supply chains and production processes to multiple tariffs. 'If I have to assemble a bunch of parts and inputs, why don't I just don't do that on the Canadian or Mexican side of the border and then pay the tariff on the final good?' she said. An even bigger challenge may involve finding and training workers who can staff up any facilities that reshore. Most Americans work in the service sector and, to the extent tariffs lead to reshoring, those facilities will likely rely heavily on automation, according to economists at the Bank of America Institute. Finding qualified workers in the U.S. is either too difficult or too expensive. 'Whatever manufacturing production comes back to the U.S. will require far fewer jobs than 30 or 40 years ago,' Hanson said. 'It's just the way the world has gone.'
Yahoo
24-05-2025
- Business
- Yahoo
Manufacturers could benefit from Trump's 'big, beautiful' bill depending on what they make
Advocates for the manufacturing sector have hailed the advancement of President Trump's "big, beautiful bill" as a landmark moment for the sector, but at least two provisions could cut the ebullience for some factory owners, depending on what they produce and their company structure. The dynamic appears particularly acute for green energy manufacturers, as well as for multinational manufacturers with facilities both in the US and elsewhere. Both are set to eat some proverbial spinach alongside the range of goodies clearly on offer in the 1,000-plus-page package. Overall though, the focus from many is on tax provisions in the bill that could boost company bottom lines, like an increase in the pass-through deduction as well as tax credits for things like depreciation, interest payments, and factories. "In short, this is a manufacturers' bill," said Jay Timmons, the National Association of Manufacturers president, touting the tax credits in particular that will be implemented if they are eventually signed into law by the president. Yet some were quick to point out that other subsectors will face challenges. None more so than green energy, with the bill set to include a rollback of clean energy credits implemented during the Biden administration for things like the making of solar panels and electric vehicles. "These are just massive headwinds for US manufacturing clean energy, which was already facing a tough global environment," said Alex Jacquez, a former special assistant to Biden for economic development and industrial strategy, in an interview. Passage of the bill as it is could lead to "much lower levels of ongoing investment," he added, as well as outright project cancellations "for sure." And markets may agree, to an extent. Clean energy stocks were down this past week, with solar stocks especially hard hit after the bill advanced. Overall, the bill has a range of provisions for factory owners, most notably a new plan for 100% expensing for structures that could be felt quickly. This would allow companies to immediately deduct the costs of building new factories and updating existing ones, with the credit currently set to be in force from 2025 through 2028. This provision is set to join other parts of the bill that would reinstitute previous business-world deductions around things like depreciation of property, interest expenses, and research and development costs. The bill also makes permanent the 199A deduction at a new rate of 23%. That deduction — also known as the pass-through deduction — is focused on often smaller businesses organized as S corporations or partnerships. The National Association of Manufacturers says 96% of manufacturers are organized as pass-throughs. Overall, it's a suite of tax credits that has also led to highly ambitious estimates from some of what the legislation will mean for economic growth. The White House, for instance, has projected that the bill — fueled by these provisions in particular — could lead to GDP growth around 4%-5% annually in the coming years. Most outside analysts suggest much more modest growth will be in the offing. Part of these estimates for slower growth are the result of a bill that is primarily focused on extending existing tax cuts for both individuals and businesses — as well as new cuts in the offing. In addition to the green energy cuts, another change in the bill is around section 899 of the IRS code to tighten restrictions on what Republicans call 'discriminatory foreign countries' with new taxes to combat some of their practices. This could directly impact companies that operate or are based in these nations. A release from a group called the Global Business Alliance reacted to those provisions, saying changes to this section will threaten US manufacturing and reporting that impacted international companies support 2.9 million manufacturing jobs — or 22% of US manufacturing employment. "The impact of this punitive and discriminatory provision will be felt by workers in communities like Paris, Kentucky, and London, Ohio, not Paris, France, or London, England," Jonathan Samford, the group's president and CEO, said in a statement. And that's in addition to an energy rollback in the bill that includes last-minute changes put into place just before the final vote that could make the credits expire more quickly. One last-minute change would require projects to break ground within 60 days of the bill's signing to qualify for some credits. Jacquez calls the passed bill "as close to full repeal as they can get" of that piece of Biden's Inflation Reduction Act (IRA). Groups have estimated wide-reaching effects could follow. Advanced Energy United says that the provisions could undermine $3 trillion in economic benefits currently being felt in the green and "advanced" energy sector. They also say it could jeopardize the 13.7 million American jobs that these credits had been projected to generate in the coming decade. "We call on the Senate and allies across Capitol Hill to ensure that the final reconciliation package preserves key tax policies," said the group's CEO, Heather O'Neill. And advocates like O'Neill could find an audience when the bill reaches the Senate in the weeks ahead. A range of red-state Republicans already highlighted the positive effects these green energy credits are having in their states as they've suggested changes need to be in the offing. Jacquez added "the pro-IRA caucus in the House just was not willing to go to the mat in the way, say, the SALT caucus was," in reference to last-minute changes that blue-state Republicans were able to secure over state and local tax deductions. "I think in the Senate, the negotiations will be much different," he added. Other changes in the Senate potentially in the offing could make the bill into a further win for manufacturers, with some senators already suggesting that some of the business-world provisions currently written with an expiration date — like for factories — be made permanent. In his statement following the bill's advancement, NAM's Timmons pledged to keep working with lawmakers to make sure the final bill is "maximally effective." Ben Werschkul is a Washington correspondent for Yahoo Finance. Click here for political news related to business and money policies that will shape tomorrow's stock prices Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Epoch Times
20-05-2025
- Business
- Epoch Times
A Way to Unshackle American Businesses and Boost the Economy
Commentary In recent comments marking the first 100 days of his second term, The president's commitment is good news for all of us. Federal taxes impose a significant economic burden. The average middle-income American family pays more than $10,000 in federal taxes each year. And, on top of taxes, the federal government imposes an enormous additional economic burden on American households through Unlike taxes, the cost of Some analysts estimate that the total cost to comply with federal regulations now exceeds $2 trillion per year. To cover their compliance costs, American businesses are forced to raise the prices they charge for the goods and services they sell. Businesses are also forced to cut their other costs, reducing what they can spend on wages, employee benefits, research and development, and production facility upgrades. Regulatory compliance costs impose a tremendous burden across the American economy—a hidden tax that we all pay in higher prices and smaller paychecks. If this hidden $2 trillion tax were spread evenly to all American households, the share for each household would amount to approximately $15,000 per year—50 percent more than the federal taxes paid by a middle-income American household! Related Stories 5/14/2025 5/13/2025 The $2 trillion figure is just one estimate. Another, by the National Association of Manufacturers, puts the total cost to comply with On the other hand, progressive advocates for federal regulation argue that compliance costs are much lower than either figure, and certainly lower than the societal benefits that result from regulation. In the absence of an agreed upon procedure to calculate regulatory compliance costs, there is no way to reconcile such differences. There is no way to collect and disseminate a single set of data that could support an informed public debate about the cost and benefits of federal regulation; no way to quantify and make public the hidden cost of federal regulation. At least until now. Congress is hard at work on the president's big, beautiful tax and budget bill. Republican leaders are hoping to complete work on the legislation and send it to the president by the Fourth of July. With that bill, Congress has a historic opportunity to bring transparency to the hidden cost of It is entirely appropriate to reimburse regulated entities for their compliance costs. Such costs are not fines or penalties or awarded damages resulting from some failure to comply with regulatory requirements. Such costs are incurred by blameless entities in the normal course of business to maintain compliance with regulations. The supposed societal benefits of such regulations are dispersed to taxpayers in general. The tax credit would simply provide a mechanism for those benefited taxpayers to reimburse the entities that funded the benefits. The tax credits claimed by regulated entities would clearly record the total cost of compliance with federal regulations and would provide the kind of information that could finally support a meaningful national discussion about the true costs and benefits of regulation. By eliminating the need for regulated entities to absorb and/or pass through their compliance costs in the prices of their goods and services, the tax credit would eliminate the enormous inflationary pressures and other economic distortions that currently result from the imposition of trillions of dollars of regulatory burdens: higher prices, lower wages, and the diversion of capital from productive applications to compliance. By imposing the incremental cost of regulations on the regulator instead of the regulated, the tax credit would significantly reduce the future number and scope of new regulations by compelling the federal government to take seriously the cost of its regulations. A tax credit equally available to all regulated entities would also eliminate the economic incentives that larger, established companies currently have to support burdensome regulations that drive their smaller, less well-established competitors out of business. Unlike the tax deduction against income currently available for compliance costs, reimbursement would not be contingent upon an entity having taxable income. All would be treated equally. The tax credit would be fully self-funding because compliance costs will be incurred, and credits claimed, only when the government determines that the societal benefits of a new regulation will justify the compliance costs to be charged to the government. Finally, the tax credit would provide a uniquely compelling economic incentive for businesses all over the world to locate or expand their operations in the United States, turbocharging other efforts underway to revitalize American manufacturing, correct the trade deficit, and expand job opportunities for American workers. Republican leaders are pressing ahead to complete work on tax and budget legislation for the president's signature by the Fourth of July. If they include this regulation compliance cost tax credit, the legislation will, indeed, be a big, beautiful bill—and a grand birthday present to our country. Reprinted by permission from Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.
Yahoo
09-05-2025
- Business
- Yahoo
Opinion - Extend Trump's tax cuts to keep the American Dream alive
The Latino community powers the U.S. economy, fueling billions in revenue, millions of jobs, and a vibrant network of small businesses. Yet years of inflation and economic uncertainty have dimmed hope for many, with most Latinos feeling the American Dream is slipping out of reach. Congress has a chance to change that by extending the Tax Cuts and Jobs Act of 2017 — a proven policy that lifted families, spurred growth and gave hardworking Americans a shot at prosperity. The Tax Cuts and Jobs Act simplified the tax code, lowered rates for all income levels and unleashed opportunity. It delivered results: real median household income rose, unemployment hit historic lows, and businesses — small and large — invested in jobs and innovation. For Latinos, the impact was striking. Hispanic unemployment dropped to 3.9 percent in 2019, and median household incomes climbed by nearly $5,000 in just two years. Small businesses, including the one-in-four new ventures owned by Latinos, found room to grow, contributing over $800 billion annually to the economy. Manufacturing also thrived. In 2018 and 2019, the sector added roughly 20,000 jobs monthly — more than double the prior four-year average. Capital investment surged, with spending up 4.5 percent in 2018 and 5.7 percent in 2019, compared to 1.4 percent in 2017. These gains strengthened communities and fueled opportunity for workers and entrepreneurs alike. These tax cuts also supercharged American competitiveness in the global economy. Businesses had the space and support to thrive, which stimulated the economy and supported all Americans. All this progress is now at risk. If Congress lets the Tax Cuts and Jobs Act expire, taxes will spike at a time when families and businesses can least afford it. The National Association of Manufacturers projects a loss of 5.9 million jobs, $540 billion in wages and $1.1 trillion in GDP if the cuts lapse. Small businesses could face tax rates as high as 43.4 percent, and a typical family of four might owe an extra $1,500 annually — more in states like California and Florida, home to millions of Latinos. For Latino-owned businesses, which drive growth and jobs, higher taxes could stifle innovation and hiring. Expiring tax cuts also threaten America's global edge. Industries like technology, biopharmaceuticals and manufacturing rely on Tax Cuts and Jobs Act incentives to fund research and keep operations stateside. Without them, firms may move overseas, taking jobs and economic vitality with them. And in a time of fierce global competition, it's more critical than ever that our businesses remain on American soil — we can't afford to lose that advantage. When American industries are at the forefront of the worldwide market, American workers and our economy see the benefits. Extending the Tax Cuts and Jobs Act isn't about politics — it's about people. It's about giving families breathing room, businesses and entrepreneurs a chance to scale, and workers a path to stability. Latino communities, like all Americans, thrive when policies reward effort and ingenuity. Congress can send a clear message: the American Dream is still within reach for those willing to work for it. Let's seize this moment to empower families and businesses. Extend the tax cuts and let opportunity flourish again. Jose Mallea is Managing Partner of Forward Global Miami, and the former CEO of the Libre Initiative, the largest Latino free market advocacy organization in the United States. Copyright 2025 Nexstar Media, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
