Research, Innovation and Technology

With a new administration and Congress on the horizon, the NAM is signaling confidence in its ability to secure wins for manufacturing in the United States, highlighting both recent achievements and policy priorities moving forward.

“The NAM has always focused on what’s best for manufacturing in America, and our track record speaks to that,” said NAM Executive Vice President Erin Streeter. “Our approach is consistent because we know what it takes to get results.”

What we’ve delivered: With post-partisan engagement, the NAM has achieved historic policy wins across both recent administrations, including:

• Tax reform: The NAM’s advocacy helped shape the 2017 tax cuts, driving billions in savings that manufacturers have reinvested in jobs, innovation and facility upgrades.
• Regulatory certainty: The NAM has played a pivotal role in streamlining regulations, reducing compliance costs under the Trump administration and working to slow regulatory expansion during the Biden years.
• United States-Mexico-Canada Agreement: The NAM was a key advocate for USMCA, safeguarding U.S. jobs by ensuring fairer competition and greater access to key markets.
• Energy advances: NAM-backed policies have supported growth in domestic energy production, creating a more stable energy market.
• Infrastructure and CHIPS Act: The NAM was instrumental in securing the historic Bipartisan Infrastructure Law and the CHIPS and Science Act, both critical for modernizing the economy, bolstering national security and ensuring a reliable semiconductor supply.

“These wins demonstrate what we bring to the table,” Streeter said. “By staying focused on manufacturing’s priorities, we can partner effectively with the new administration and Congress to create and protect jobs and strengthen communities.”

Looking ahead: The NAM’s focus on core issues remains critical for keeping the sector competitive and resilient, Streeter continued. These issues include:

• Securing tax reform: The NAM’s “Manufacturing Wins” campaign aims to lock in key 2017 tax provisions that manufacturers rely on for stability and growth. “Tax reform has been a game-changer,” said Streeter. “Protecting that progress means more jobs and manufacturing-led growth across the country.”
• Regulatory certainty: The NAM is advocating for balanced regulations that support competitiveness. “Manufacturers thrive with clear, fair rules,” Streeter noted. “We’re making sure Washington understands the importance of regulatory stability—and the danger of excessive regulation.”
• Energy security: The NAM is working to secure reliable, affordable energy while fostering innovation in sustainability. “Energy security and grid reliability are top of mind for every manufacturer,” Streeter added. “We’re ensuring manufacturers can continue to innovate, grow and drive America forward.”

Bottom line:  The NAM remains focused on advocating for policies that strengthen U.S. manufacturing. “Our success is built on trust and influence,” Streeter said. “Our members know the NAM is a constant force, with the relationships and expertise to deliver, regardless of political changes.”

In related news, President-elect Trump has named campaign manager Susie Wiles as White House chief of staff (Reuters, subscription), a choice NAM President and CEO Jay Timmons called “a powerful move to bring bold, results-driven leadership to the White House from day one.”

Manufacturers, and the data centers they support and use, rely on stable, affordable energy sources. Federal policy must help strengthen the U.S. electric grid and supply chains and address cybersecurity risks and workforce needs, the NAM told the Commerce Department Monday.  

What’s going on: “Manufacturers use one-third of America’s energy, and as such, the growth of our nation’s energy supply is critical to manufacturers’ ability to create jobs, expand operations and grow the economy,” NAM Vice President of Domestic Policy Chris Phalen told Commerce’s National Telecommunications and Information Administration in response to a request for comment on the challenges facing data center growth.  

• “In addition to growth in energy generation, manufacturers depend on a stable electric grid to ensure the continuous operation of their facilities.”

The challenge: Grid stability is at approaching an inflection point due to expected explosive growth.

• Phalen cited the 15% potential rise in power demand by the end of the decade (Wood Mackenzie) and an August 2024 Energy Department study that found “electricity generation would need to double to keep up with demand” on the grid.

Call to action: There are several steps that need to be taken to confront the challenges posed by the nationwide growth of data centers, Phalen told the agency. They include the following:

• Reforming the U.S. permitting system: “[T]he NAM strongly encourages the NTIA and all federal agencies with equities in meeting growing energy demand to align with our permitting principles,” which include “[e]xpediting judicial review, [a]ccelerating the permit process for needed energy infrastructure, including more transmission lines, pipelines and permanent carbon sequestration sites … [and] [u]nlocking access to domestic critical minerals.”
• Ensuring energy affordability: In particular, the NTIA should look at the role of natural gas “as a source of baseload power to the data center industry” and as a backup to renewable energy sources.
• Expediting licensing: The federal government should speed up the licensing process for next-generation technologies, such as small modular and advanced nuclear reactors.
• Addressing component shortages: Because “[r]obust growth in data center construction is heightening demand for related essential inputs, stretching existing supply chains … we encourage the NTIA to explore and support federal policies to increase domestic capacity of critical equipment to meet the needs of a modern grid.”
• Mitigating cybersecurity risks: NTIA should urge the Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency to revise its April draft rule requiring stringent reporting standards for certain security incidents. It should ensure that the final version “fosters collaboration, rather than confusion, between cloud providers and customers and enables each to respond to cyber incidents effectively.”
• Bolstering workforce development efforts: Congress should reauthorize the Workforce Innovation and Opportunity Act, expand Pell grant eligibility to short-term training programs, give more support to industry sector partnerships and more “to reduce the skills gap” that exists in the data center and manufacturing industries.

Manufacturers agree that the U.S. should address the potential national security and privacy risks associated with connected vehicles—those that use technologies to communicate with each other and other systems. But “[n]ational security, privacy and economic strength can be pursued in conjunction with one another,” the NAM told the Commerce Department this week.
 
What’s going on: In September, the Commerce Department’s Bureau of Industry and Security proposed rules to ban connected vehicles that integrate information and communications technology from China and Russia (POLITICO).

• While manufacturers support safeguarding efforts, “[o]ur competitiveness also requires national security challenges to be addressed through proportionate actions … [that] do not unduly hinder” American manufacturing, NAM Managing Vice President of Policy Chris Netram told BIS on Monday.
• The rule’s software prohibitions would go into effect for vehicles model year 2027, while the hardware regulations would take effect for vehicles model year 2030. The NAM is asking BIS to discuss with stakeholders whether they need more time to comply, given the length of the automotive design and development cycles.

What it could do: If finalized, the rule would require automotive manufacturers using Chinese or Russian technology to find new suppliers.
 
The problem: “Automotive supply chains are highly complex, with [information and communications technology and services] embedded in the products of many sub-suppliers who sell to automotive original equipment manufacturers,” Netram continued.

• What’s more, information and communications technology and services “are foundational technologies across the manufacturing ecosystem and wider economy. As such, the rule in its current form could generate unintended consequences both within the automotive industry and across the broader ICTS supply chain, violating the department’s obligation to engage in reasoned decision making and avoid arbitrary and capricious rulemaking.”   

What should happen: The NAM urged BIS to take several actions, including the following:

• Clearer definitions: Certain wording in the rule should be rephrased for clarity, including “Person Owned by, Controlled by or Subject to the Jurisdiction or Direction of a Foreign Adversary” and “Connected Vehicle.”
• Covered software: “[T]he NAM urges BIS to consider revising the proposed rule to ensure it does not require visibility into and control over the software code provided by an OEM’s tier 3 suppliers and beyond.”
• Specific authorizations: “[T]he NAM recommends that BIS issue clear guidance about what criteria the Office of Information and Communications Technology would use to review and approve the risk assessments and the measures proposed by the applicant to mitigate the risks.”
• Attestations of compliance: Allow companies “to attest to their compliance” rather than “document and demonstrate compliance” to safeguard trade secrets.

The final say: With the NAM’s recommended changes, the BIS’s draft rulemaking “will support national security and privacy while ensuring that a vibrant manufacturing industry can continue to innovate and power growth in America for years to come,” Netram concluded.

Manufacturer sentiment fell in the third quarter of this year, according to the NAM’s Q3 2024 Manufacturers’ Outlook Survey, out Wednesday.

What’s going on: Results of the survey, which was conducted Sept. 5–20, reflect “preelection uncertainty,” NAM President and CEO Jay Timmons said—but also larger economic concerns.

• “The good news is that there is something we can do about it,” said Timmons. “We will work with lawmakers from both parties to halt the looming tax increases in 2025; address the risk of higher tariffs; restore balance to regulations; achieve permitting and energy security; and ease labor shortages and supply chain disruptions.”

Key findings: Notable data points from the survey include the following:

• Some 62.9% of respondents reported feeling either somewhat or very positive about their business’s outlook, a decline from 71.9% in Q2.
• A weaker domestic economy was the top business challenge for those surveyed, with 68.4% of respondents citing it.
• Nearly nine out of 10 manufacturers surveyed agreed that Congress should act before the end of 2025 to prevent scheduled tax increases on manufacturers.
• The overwhelming majority—92.3%—said the corporate tax rate should remain at or below 21%, with more than 71% saying a higher rate would have a negative impact on their businesses.
• More than 72% said they support congressional action to lower health care costs through the reform of pharmacy benefit managers.

The last word: “When policymakers take action to create a more competitive business climate for manufacturers, we can sustain America’s manufacturing resurgence—and strengthen our can-do spirit,” Timmons said.

• “This administration and Congress—and the next administration and Congress—should take this to heart, put aside politics, personality and process and focus on the right policies to strengthen the foundation of the American economy.”

Medical supply chains are critical to ensuring the health and security of Americans—and Congress should act to bolster their resiliency, the NAM told members of Congress this month.

What’s going on: “The COVID-19 pandemic brought to light the risks and instability resulting from concentration and choke points in medical supply chains, though the pandemic also showed how medical supply chains can quickly adjust to external shocks,” NAM Managing Vice President of Policy Chris Netram told Reps. Brad Wenstrup (R-OH), Blake Moore (R-UT) and August Pfluger (R-TX) in response to a request for information on how to improve medical supply chains.

What should be done: The NAM recommended that Congress should work with manufacturers “on a comprehensive approach to find ways to onshore, near-shore and friend-shore more of the medical supply chain,” Netram continued.

There are several actions the federal government should take to fortify medical supply chains, including:

• “[C]reating an environment where small businesses can continue to thrive” and where large companies can maintain their pandemic-era practices of “leveraging sources of domestic production when feasible, working with existing smaller suppliers to improve their reliability” and sourcing goods through new suppliers;
• Streamlining the Food and Drug Administration’s new-supplier certification process;
• Taking “creative steps to incentivize onshoring, near-shoring and friend-shoring, as opposed to imposing punitive or unworkable requirements to do so”;
• Passing the Medical Supply Chain Resiliency Act (H.R. 4307/S. 2115), which would authorize the president to strategically create new trade agreements specific to medical goods with our allies and partners;
• Strategically refining Section 301 tariffs on imports from China;
• Restoring “immediate research and development expensing and full expensing of capital equipment purchases,” ensuring “that the corporate tax rate does not exceed 21%” and making the pass-through deduction permanent; and
• Completing “reauthorization of the Workforce Innovation and Opportunity Act and expansion of Pell grant eligibility to short-term training programs,” as well as supporting solutions that incentivize companies to collaborate to reduce the manufacturing-worker shortage.

The bottom line: “[A]n approach that creates incentives that reduce the cost and complexity of moving supply chains can help U.S. manufacturers to be more resilient in the face of a future global crisis and better able to serve patients who depend on these products,” Netram said.

In high-level meetings with government, manufacturing and trade group leaders held in Mexico last week, the NAM hammered home a key message: For North American manufacturing to remain globally competitive, Mexico must protect investor holdings in the country.
 
What’s going on: During a jam-packed three-day visit to Mexico City, NAM President and CEO Jay Timmons and an NAM contingent met with top officials in the new Sheinbaum administration, as well as leadership at multiple agencies and associations.

• These included newly appointed Deputy Trade Minister Luis Rosendo Gutiérrez, the Business Coordinating Council (CCE), the Confederation of Industrial Chambers of Mexico (CONCAMIN), the Mexico Business Council (CMN), the National Council of the Export Manufacturing Industry (INDEX) and others.   

What they said: The NAM’s main message at each gathering was the same: Companies investing in Mexico need assurance that their portfolios will be protected regardless of the fate of proposed judicial reforms in the country.

• The NAM also underscored the importance of the U.S.–Mexico–Canada Agreement, which is due for review in 2026, and the necessity of ensuring that the deal is upheld for all three parties.
• If its terms are respected, USMCA could help North American manufacturing outcompete China.

On China: This week, just days after his office’s meeting with the NAM, Gutiérrez announced that the Sheinbaum administration will seek U.S. manufacturers’ help to reshore—mainly from China—the production of some critical technologies (The Wall Street Journal, subscription).

• “We want to focus on supporting our domestic supply chains,” he told the Journal, adding that talks with U.S. companies are still in the informal stage.

​​​​​​​The NAM says:  “Manufacturing is at the heart of the USMCA,” said NAM Vice President of International Policy Andrea Durkin, who was part of the NAM group on the ground in Mexico. “The NAM intends to work to ensure that the agreement strengthens the competitiveness of manufacturers.”
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The Defense Department’s Office of Strategic Capital is now accepting applications for flexible direct loans to build, expand and/or modernize “critical technologies” facilities (Federal Register).

• It’s also seeking input from companies and trade associations on the Defense Department’s loan program, via a Request for Information open through Oct. 22 (Federal Register).

What’s going on: The OSC’s credit program, launched Sept. 30, aims “to attract and scale private capital in industries and technologies that are critical to America’s national and economic security,” according to the Defense Department. This is part one of the application process.

• The financing is geared toward manufacturers that must spend significantly on industrial or specialty equipment to create new assembly lines in existing facilities.
• The money is also intended to help them cover “soft” expenses, such as factory preparation and installation, associated with critical technology projects.

Why it’s important: “The funding from this program could benefit manufacturers of all sizes that are working to expand their businesses and product lines in critical areas of the economy,” said NAM Director of Energy and Natural Resources Policy Mike Davin.

• The OSC loans offer flexible terms, a U.S. Treasury-comparable interest rate, long repayment periods and deferred payments.

Who’s eligible: Manufacturers within the 31 “Covered Technology Categories”— which include advanced manufacturing, cybersecurity, battery storage and spacecraft—are encouraged to apply.

• There is no company-size or employee-number threshold or limit, and manufacturers with existing federal grants are eligible.

The search for alternatives to chemicals called PFAS has been going on for years. Recently, materials design company Techmer PM created one—a new chemical for use in polymer processing.

The new solution: Last year, the Clinton, Tennessee–based manufacturer introduced the HiTerra T5—a polymer processing aid that helps maintain film surface smoothness and die-lip buildup—which replaces traditional chemistry based on per- and polyfluoroalkyl substances.

• The HiTerra T5, which meets Environmental Protection Agency guidelines and does not interfere with other additives, is being used in large-scale commercial undertakings by Techmer PM customers.

Why it’s critical: In March, the EPA issued the first federal reporting limits and guidelines for tracking the use of PFAS in manufacturing, along with other PFAS-related regulations. Individual states are also imposing their own restrictions on PFAS chemicals.

• The current regulatory environment is motivating plastics processors and raw materials suppliers to seek new alternatives to this chemistry.
• “The biggest challenge is that fluorinated chemistry is excellent at reducing friction, reducing melt fracture, improving hydrophobicity, stain resistance and helping the processing that manufacturers use, for example, to make film,” Techmer PM CEO Mike McHenry told the NAM in a recent interview. “It also helps with wear on small gears. It’s very effective, and it has unique properties that customers are accustomed to.”

More replacement efforts: Techmer PM is working closely with its customers to come up with additional PFAS alternatives, McHenry said.

• Because one of PFAS’ most useful characteristics is its ability to resist fire, “we’re looking at ways to remove halogen flame retardants, including fluorinated compounds” and find a comparable alternative for customers, McHenry said.

Unrealistic timelines: While the firm is hard at work developing potential replacements, the stringent deadlines that the EPA has set for the reporting and potential elimination is damaging, McHenry told us.

• “It can take years to get use approval [for alternatives], and finding them is a huge challenge in itself,” he went on. “We see the timelines being put forth as something that needs to be looked at, and [manufacturers] need support.”
• “For some uses—tubing, for example–it’s going to be very difficult to find something that will work the way fluorinated chemistries do. As much as we all want to move away from [PFAS], there are some instances in which it will be worse” to rush the search than continue using PFAS, he added.
• One of these areas is medical devices, McHenry said. The gowns used to protect surgeons and nurses, for example, are coated in PFAS-containing substances, which “will be very difficult to replace.”

The long view: For many applications, dependable alternatives will likely be found at some point, McHenry concluded.

• “I think we’ll find alternatives, but it’s not one-size-fits-all, and it will take time,” he said. “The versatility of fluorinated compounds is unique.”

Generative AI tools like ChatGPT and Midjourney have grabbed headlines, but artificial intelligence–driven innovations like digital twins, computer vision and robotics are also transforming manufacturing in America.

Last week, the NAM briefed congressional staff from the House Task Force on AI to help educate policymakers on the role manufacturers are playing as both developers and deployers of AI technologies. The briefing follows the publication of the NAM’s first-of-its-kind white paper on the ways manufacturers are using AI.

The briefing featured a panel discussion among AI experts from major manufacturers, as well as the AI leads from the NAM and the Manufacturing Leadership Council.

Faster breakthroughs: AI is accelerating research and development at manufacturing companies, the panelists reported, allowing them to create or improve products in record time.

• For example, pharmaceutical companies are using AI to develop and test new lifesaving drugs, while automakers are using it to improve vehicle components.

Increased safety: AI is helping to prevent accidental collisions on the shop floor and enhancing equipment that makes tasks safer, such as robotic exoskeletons that collect and learn from data on the wearers’ movements and environment.

• In addition, companies are using AI to better understand and monitor product performance, helping reduce maintenance costs and avoid dangerous malfunctions.

Augmenting human labor: Manufacturers often use AI technology to complement and augment the work of humans, according to the panelists.

• Human operators still make decisions and oversee operations, but AI has helped improve the reliability of manufacturers’ processes as well as the quality, delivery and safety of their products.
• This combination of human ingenuity and AI enhances efficiency while still prioritizing human experience.

Policy recommendations: Panelists discussed what Congress can do to support AI-driven growth in the manufacturing sector, including:

• Modernizing compliance requirements to support AI development and adoption, especially for small manufacturers most affected by regulations;
• Ensuring that the regulatory environment helps the U.S. maintain global leadership in AI innovation, including by adjusting rules based on context and risk; and
• Creating or supporting initiatives to train workers in AI-related skills, including by providing the data needed to develop these programs.

The last word: “The future of manufacturing is inseparable from the future of AI,” said NAM Senior Director of Technology Policy Franck Journoud.

• “It is crucial that policymakers hear directly from manufacturers that are leading the development and adoption of this transformative technology. The NAM is thankful to have had an opportunity to share this world-class expertise, and we are committed to working with Congress to ensure the U.S. remains a global leader in AI innovation.”

The NAM has launched a new wave of ads in D.C. and nine states, extending its seven-figure campaign urging policymakers to reign in pharmacy benefit managers, underregulated middlemen who drive up the costs of prescription medications for manufacturers and manufacturing workers.

A quick refresher: PBMs sit in the middle of the health care industry, negotiating with employer health plans, insurers, biopharmaceutical manufacturers, pharmacies and other players to determine what prescriptions employees can access and what they pay for them. While their job is ostensibly to reduce the costs of medicines, often they do the exact opposite.

• PBMs have been found to steer patients toward pricier options, inflict steep mark-ups and hidden fees and even pocket large portions of the rebates that biopharmaceutical manufacturers intend for American workers and their families.

NAM in action: The NAM has been a staunch voice supporting PBM reform on Capitol Hill, recently laying out manufacturers’ concerns for the House Committee on Oversight and Accountability.

• The committee conducted its third hearing on PBM overreach in July, when it also released a highly critical report on PBMs that echoed many of the NAM’s concerns.
• In addition, the NAM is supporting several key measures to increase oversight of PBMs’ business models and reform their pricing strategies, including the DRUG Act and the PBM transparency provisions in the Lower Costs, More Transparency Act.

What Congress should do: The NAM is advocating for three major reforms to the PBM system, including:

• Increasing transparency in PBMs’ business models, including how their compensation influences health care decisions and how their policies dictate a medicine’s cost and formulary placement;
• Rebate pass-through, which will ensure health care savings are passed directly to manufacturers and their workers rather than being pocketed by PBMs; and
• Delinking PBMs’ compensation from a medicine’s list price, removing their incentive to put upward pressure on list prices to maximize their own profits.

Benefits for all: The NAM is calling on Congress to enact these reforms in the commercial insurance market, not just in government programs like Medicare and Medicaid, so that all Americans can enjoy lower-cost health care benefits.

What to watch: The NAM is calling on Congress to act on this issue during the lame-duck session following the election.