Trade

There’s a lot for manufacturers in the U.S. to celebrate right now, starting with the historic passage of the One Big Beautiful Bill Act with pro-growth tax provisions—but they are still seeking more policy fixes to help them grow and compete, the NAM said last week at the 14th annual John Hazen White Manufacturing Forum at The Brookings Institution.

Starting with tax policy: “When we think about the president’s manufacturing strategy, his manufacturing policies, you really have to start with tax policy,” NAM Managing Vice President of Policy Charles Crain said about manufacturing under the Trump administration.

• “We know from the 2017 Tax Cuts and Jobs Act the impact that pro-growth tax policy [had] on manufacturing in 2018 and 2019. Coming out of the TCJA, we saw record capital investments in the manufacturing industry. We saw record job increases. We saw record wage increases.”
• The One Big Beautiful Bill Act, signed into law on the Fourth of July, “prevents … tax increases, and it really should support manufacturers’ efforts to drive manufacturing growth,” Crain continued, adding that the OBBBA included incentives for capital equipment purchases, research and development, factory building and more.
• The legislation is “a big win” for manufacturing and “a real credit to the president,” he said.

Reaching a shared goal: Even if the U.S. were “operating at full capacity,” manufacturing in the country would still require imports from other nations—making a commonsense trade policy a necessity, Crain said.

• In practice, manufacturing in the U.S. is only making about 67% of inputs required for finished goods, Crain said.
• “So we really need to solve for that 30-ish percent of outstanding inputs that we need to make things here. … Manufacturers need inputs to make things, and we need export markets to sell things. And so we think that a commonsense trade policy can allow for the president to achieve [the administration’s] trade policy goals without preventing manufacturers from investing here in America, which is a goal we all share.”

Giving manufacturers certainty: In the latest quarterly NAM Manufacturers’ Outlook Survey, just 55% of manufacturers—the lowest reading since the global pandemic in 2020—reported feeling positive about their companies’ outlook, Crain said. The top reason for the optimism drop? Trade uncertainty, something that a comprehensive U.S. trade policy can help remedy.

• Not knowing what to expect next when it comes to trade “makes it more difficult to make long-term investment decisions that we know drive manufacturing growth,” according to Crain.
• While tax uncertainty has now “been taken off the table” thanks to the passage of the OBBBA, “we’re still facing additional barriers to those long-term decisions that we need to create jobs here in America.”
• It’s also critical to manufacturing in the U.S. that the current corporate tax rate be maintained, Crain said. “[I]f we have a 35% corporate rate as opposed to the current 21[%], it’s going to be really difficult to onshore domestic manufacturing.”

Fewer regulations needed: Manufacturing in the U.S. also needs more balanced regulations—and fortunately, that’s something the administration began doing on day one.

• “[M]anufacturers, in our experience, have been very encouraged to see the administration taking a second look at some of the rules that were finalized in recent years … finding ways to maintain reliable rules of the road, but [also] to make those rules less costly.”

Open jobs in manufacturing: Manufacturers also remain committed to filling the 400,000 open manufacturing jobs in the U.S., Crain said, addressing an audience question.

• Manufacturers “are really focused on providing competitive benefits, having flexible work schedules, having onsite child care” as well as “partnering with local community colleges to implement training programs [and] partnering with the military to bring folks coming out of active duty into manufacturing shop floors.”

The takeaways: The OBBBA “delivers for manufacturers in America by making pro-growth tax provisions permanent,” Crain wrote on X following the event.

• But “[t]o ensure we can continue to grow manufacturing in America, policymakers must pursue a comprehensive manufacturing strategy that will provide manufacturers the tools, and the certainty, needed to make long-term investments,” he wrote in a second post.

President Trump issued more tariff letters late last week, warning major U.S. trading partners of the tariffs that will go into effect if negotiations do not lead to agreements by Aug. 1. Tariffs on Canadian imports will be assessed at 35%, while Mexican and European Union imports will see new tariffs of 30%.

Canada: The letter to Canada accuses the country of failing to stop the flow of fentanyl drugs into the U.S., while also citing tariff and nontariff trade barriers, including dairy policies.

• Canada is subject to an International Emergency Economic Powers Act fentanyl tariff rate of 25%. According to an April 2 executive order, if IEEPA fentanyl tariffs are withdrawn, a 12.5% IEEPA “reciprocal” tariff rate would replace them.
• USMCA-compliant goods are exempt from the existing Canada tariffs. The July 10 letter does not specify whether goods that qualify for an exception under the USMCA will continue to be exempt. It also does not say whether energy and energy resources from Canada will still be subject to the lower 10% tariff.
• The letter also warns that goods that are transshipped will be subject to an unspecified, higher tariff, and that an additional 35% tariff will be imposed should Canada retaliate.

Mexico: The letter to Mexico cites the country’s “failure to stop the Cartels,” while also mentioning trade barriers.

• Mexico is subject to the same arrangement as Canada under the April 2 executive order—IEEPA fentanyl tariffs of 25%, which if withdrawn would be replaced by a 12.5% “reciprocal” tariff.
• The letter to Mexico is likewise unclear about the USMCA exceptions and contains similar warnings about transshipment penalties and an additional 30% tariff in the case of retaliation.

EU: The European Commission also received a letter, which threatens the EU with a 30% tariff, a number “far less than what is needed to eliminate the trade deficit.” The letter also says that the U.S. expects “complete, open market access.”

• EU retaliatory tariffs were set to take effect this week but have been suspended pending negotiations.

The response: In a  post on X, Canadian Prime Minister Mark Carney said, “We are committed to continuing to work with the United States to save lives and protect communities in both our countries. … We are strengthening our trading partnerships throughout the world.”

• In a statement, EU Commissioner Ursula von der Leyen said the EU is “working towards an agreement by August 1,” adding that the EU “will take all necessary steps … including the adoption of proportionate countermeasures if required.”

President Trump signed more individual country letters this week, following his extension to Aug. 1 of the pause on “reciprocal” tariffs over 10%.

A quick recap: The president had delayed tariffs on individual countries, which had been announced on April 2, until July 9. He imposed a flat 10% tariff until then on all countries except Mexico, Canada and China.

• This week, he extended that pause until Aug. 1. If new trade deals are not reached by then, individual country rates will go into effect.

More letters: The president had issued letters on July 7, assigning tariff rates to imports from more than a dozen countries and followed those up with more letters to other countries on July 9. The second round included Libya, Iraq, Algeria, Moldova, Brunei and the Philippines.

• The letters also warned that if countries impose retaliatory tariffs, U.S. levies will rise as well. The increases cited in the letters range from 25% to 50%.
• You can find a full chart here of the countries that have received letters, as well as those that were included in the April 2 order but have not yet received letters.

Targeting Brazil: The U.S. ran a trade surplus with Brazil in 2024, which means it was not included in President Trump’s imposition of tariffs in April.

• Decrying the legal proceedings against former Brazilian president Jair Bolsonaro along with social media censorship policies (as well as trade barriers), President Trump announced that the U.S. is imposing a 50% additional tariff on Brazil, which will rise another 50% should Brazil retaliate.
• President Trump also ordered the United States Trade Representative to open a Section 301 investigation into Brazil’s “attacks on the digital trade activities of American companies” and other unfair trade practices, which could result in other tariffs.

Section 232: In a Truth Social post, the president mentioned plans for Section 232 tariffs on copper.

• The administration will have to issue a proclamation and provide documents defining the scope of the tariffs, including which products are subject to them, so details are yet to come.

The NAM is monitoring the administration’s actions on Section 232 closely and has been detailing manufacturers’ interests and concerns for the administration. You can read about its advocacy here.

Operators of U.S. ports say that the Trump administration’s proposed tariffs on port equipment would add tens of millions of dollars in costs to much-needed upgrades (The Wall Street Journal, subscription).

The background: “The administration is proposing tariffs of up to 100% on Chinese-made cranes and other cargo-handling equipment as part of broader efforts to counter China’s dominance of the maritime industry.”

• “Shipping industry officials say the fees would be stacked on top of 25% tariffs on Chinese-made cranes introduced under the Biden administration, and in addition to China duties being considered by Trump’s trade team.”

Chinese dominance: One Chinese company, Shanghai Zhenhua Heavy Industries, is the maker of nearly 80% of ship-to-shore cranes used in the U.S., and Chinese firms produce a total of 70% of all such cranes worldwide, according to U.S. government data.

• Chinese cranes cost about $15 million on average—several million dollars less than competitors’ cheapest offerings, according to shipping industry leaders.
• Meanwhile, there are no domestic U.S. producers of these cranes, nor can smaller manufacturers in other countries provide enough cranes to equip U.S. ports.

The risks: “Administration officials worry China’s control of critical infrastructure is an economic and a national security threat. They also allege some Chinese-made cranes have been fitted with communications equipment that could be used for espionage.”

The ask: Since a typical order for a ship-to-shore crane takes two years to fulfill, “port operators are asking the administration to provide tariff exemptions for cranes ordered before the end of 2024.”

• “They are also asking the [U.S. Trade Representative’s] office to delay imposing levies on new crane orders for three years to give time for crane manufacturing to develop in the U.S., or for manufacturers in allied countries to expand production.”

NAM in action: The NAM has been in close contact with the USTR, advocating for policies that strengthen American shipbuilding instead of imposing burdensome new fees.

• In March, the NAM weighed in on the Trump administration’s plan to impose fees on Chinese ships entering U.S. ports, saying, “The NAM encourages the administration to focus on revitalizing American shipbuilding—not burdening manufacturers in the U.S. through new port fees that will reduce the availability of the necessary cargo capacity at U.S. ports, increase pressure on domestic infrastructure and raise costs that may render American exports less competitive around the world.”

Earlier this week, the NAM followed up with the USTR to stress the burden that these port fees would cause, citing especially the difficulty they would pose for vehicle and liquefied natural gas exports. “We continue to have concerns regarding the overall impact to manufacturers in the U.S. of proposed and impending port fees,” said NAM Vice President of International Policy Andrea Durkin.

The Trump administration has approved a $10 billion infrastructure project that will speed up freight crossings over the U.S.–Mexico border—via an elevated transit system for self-driving shuttles (The Wall Street Journal, subscription).

What’s going on: Austin, Texas–based Green Corridors received a presidential permit to construct a 165-mile “guideway” connecting Laredo, Texas, and Monterrey, Mexico, using autonomous diesel-electric hybrid shuttles to carry cargo.

• The system would operate like a monorail, with truck drivers dropping off 53-foot trailers at terminals before shuttles transport them across the border.
• The company plans to build four terminals of about 100 acres each, with two on each side of the border.

Why it matters: Trade volume at the Port of Laredo has surged 28% since 2019, with more than 3 million truck crossings last year.

• Current wait times average 45 minutes on weekday afternoons at existing bridges, creating supply chain bottlenecks for imports of auto parts, vehicles, appliances and electronics.

How it will work: The guideway would run alongside existing truck and rail operations, reducing congestion at this busy crossing.

• Green Corridors will charge toll fees for companies using the service, focusing on trips under 200 miles rather than competing with long-haul railroads.

What’s next: Green Corridors still needs Mexican government permits and must negotiate with landowners before construction can begin.

• The company expects to complete the project and enter testing by 2031, with the presidential permit expiring in five years if construction has not started by then.

NAM advocacy: As the U.S., Canada and Mexico prepare to discuss the U.S.–Mexico–Canada Agreement, the NAM remains one of the staunchest proponents of U.S. trade with the countries on its borders, having played an instrumental role in securing the USMCA in the first place.”

• The stakes remain high, as International Trade Administration data show: one-third of U.S. imported manufacturing inputs originate in Canada and Mexico.

President Trump has extended the 90-day pause on “reciprocal” tariffs over 10% until Aug. 1 and issued revised reciprocal tariff rates for several countries, set to take effect if no agreements are reached by then.

The extension: President Trump issued an executive order effectively extending the baseline additional 10% “reciprocal” tariff on all countries (except Mexico, Canada and China) until Aug. 1.

• No new trade deals have been announced, though the White House has hinted that some may be revealed in the next day or two.
• This pause is an extension of the original pause in the “reciprocal” tariffs that were announced on April 2. The pause has been in place since April 9.

Country-specific rates: The president also announced revised “reciprocal” tariffs for specific countries in the form of letters to his counterparts. These rates are similar to those announced in April, with some slightly lower.

• Courtesy of the NAM’s trade policy experts, here is a link to a chart  comparing the April 2 rates with the July 7 rates and links to where each letter is posted on the president’s Truth Social account.
• These letters also declared that if U.S. trading partners eliminate tariffs and other trade barriers, the U.S. may adjust the rates “upward or downward.”
• However, the letters warn of retaliation if countries raise tariffs in response to these rates.

Other tariffs: The July 7 EO does not modify other International Emergency Economic Powers Act tariff rates applied to Canada, Mexico or China, and does not change any Section 232 tariffs in effect.

Manufacturing accelerator: The NAM has offered its own policy solution for the administration that will jumpstart American manufacturing, the U.S. Manufacturing Investment Accelerator Program .

• This program offers a way to bring in inputs essential to manufacturing in the U.S.—and it rewards manufacturers that expand production, invest in new equipment and create jobs here at home.

From personal heroes to tax reform and tariffs, NAM President and CEO Jay Timmons covered it all in his recent appearance on iHeart Radio’s “CEOs You Should Know.”

From the beginning: In his June 9 interview with show host Mike Howard, Timmons told listeners about his journey from a childhood in the mill town of Chillicothe, Ohio, to his current role, running the largest manufacturing trade association in the U.S.

• As both the only child and the only grandchild in his family, Timmons was inspired professionally and personally by his parents and grandparents.
• Timmons’ grandfather “stood in line for six months during the Great Depression trying to get a job in manufacturing because he knew that that would be a way forward for his family,” he said.
• His mother climbed the ranks at the Chillicothe Gazette, eventually becoming president and CEO of the newspaper, and his father owned an appliance store, Timmons Appliance and TV.

Part of the Reagan Revolution: As an undergraduate student at Ohio State University, Timmons decided that college wasn’t for him—and he wanted “to do everything I could to help Ronald Reagan succeed.”

• So, he headed for Washington, D.C., where he ended up on Capitol Hill. His desire to enter politics “was really about [wanting to help shape] policy that enabled people to live their best lives.”
• Timmons ended up becoming the youngest chief of staff in the U.S.—to Virginia Gov. George Allen.

The road to manufacturing: Later, Timmons took over the policy and government relations team at the NAM, where he spent six years shaping the association’s agenda before being named CEO in 2011.

• “[M]anufacturing is not a partisan issue, and [neither is] the success of America,” Timmons continued. The industry “is really infused into the fabric of all we are as Americans. … [M]anufacturing helped us to build the infrastructure system that made us the strongest, most connected economy in the world in the 1950s and ’60s.”

Rocket fuel: From 2018 to 2022, manufacturing “had record investment, we had record hiring, and we had record wage growth over the course of the next three years—because of that rocket fuel, as President Trump called it,” the Tax Cuts and Jobs Act of 2017.

On tariffs: The manufacturing industry in the U.S. is hoping the administration and its trading partners will make trade deals during the current three-month pause on tariffs.

• “[M]anufacturers … are very hopeful that the administration really is going to be able to settle in their 90-day window all of these potential trade agreements throughout the world,” he said, adding that it would mean that “manufacturers actually can have the certainty they need to again invest higher and increase wages and benefits.”

Mexico’s first judicial elections occurred on Sunday, and the results, while not yet completely final, raise questions about the integrity of the country’s judges going forward (AP News).

State of play: With more than 98% of the vote tallied as of Tuesday night, President Claudia Sheinbaum’s party is poised to control the Supreme Court, with a majority of judges holding ideological or political ties to the ruling party.

• Experts, allied nations and companies that do business in Mexico—including manufacturers—have voiced concerns that judicial elections will turn the judiciary into a political arm of the president’s party.

The background: Before leaving office, Sheinbaum’s mentor and predecessor President Andrés Manuel López Obrador forced through a controversial reform mandating elections for judges.

• The NAM has issued multiple warnings since these reforms were first proposed last year, telling Mexican officials in person that companies investing in Mexico need assurance that their portfolios will be protected under the new judicial regime.
• “We’re concerned that some of the reforms as proposed could harm Mexico’s standing as an attractive place to do business,” NAM Vice President of International Policy Andrea Durkin said on the “Imagen Empresarial” (“Corporate Image”) podcast in September. “Manufacturers pay attention to how banks are factoring these potential changes to the constitution into Mexico’s risk profile.”

More to come: “Votes were still being counted for the majority of the 2,600 federal, state and local judge positions up for grabs in Sunday’s elections.”

The NAM says: “A lack of confidence in Mexico’s judicial system could imperil future U.S. investments, particularly at a time of great uncertainty in trade relations between our countries,” said Durkin today.

President Trump on Tuesday evening signed a proclamation that doubled Section 232 tariffs on steel, aluminum and derivative products from 25% to 50%.

Why it matters: The move marks a significant escalation in trade policy, with no exemptions or exclusions—and has immediate implications for manufacturers relying on imported metals.

The details: The new rates took effect at 12:01 a.m. EDT on June 4. There is no exemption for goods on water.

• The proclamation builds on a Feb. 10 executive order that reinstated 25% tariffs on imports of steel, raised tariffs on aluminum from 10% to 25%, revoked all country exemptions and quotas, terminated all general production exclusions granted by the Department of Commerce and rescinded the department’s authority to process any new or renew any product exclusion requests.
• Unpublished annexes are expected to provide more clarity on product scope. Guidance from U.S. Customs and Border Protection is anticipated in the coming days.

Zoom out: President Trump says domestic production capacity remains underutilized and foreign producers continue to flood the U.S. market with low-priced goods—undercutting the competitiveness of the U.S. steel and aluminum industries.

• “Increased tariffs will more effectively counter foreign countries that continue to offload low-priced, excess steel and aluminum in the U.S.,” the proclamation reads.

Between the lines: The U.K. narrowly avoids higher tariffs—for now. Steel and aluminum from the U.K. remain at 25%, contingent on compliance with the U.S.–U.K. Economic Prosperity Deal. Rates could rise to 50% on or after July 9 if the U.K. falls short.

“Stacking” reshuffled: The June 3 proclamation shakes up the May 2 tariff “stacking” executive order with key changes:

• Canada and Mexico: Products subject to new 50% Section 232 steel and aluminum tariffs are not subject to International Emergency Economic Powers Act fentanyl tariffs.
• IEEPA “reciprocal” tariffs: For countries facing “reciprocal” tariffs, companies must pay the 10% on all non-aluminum, non-steel content—or face “severe consequences” for underreporting.

The NAM says: Amid ongoing trade negotiations, manufacturers continue to press for zero-for-zero tariff outcomes with top export markets, so they have the certainty they need to plan, hire and compete—while also gaining access to the globally sourced raw materials and critical minerals necessary to make things in America.

• As NAM President and CEO Jay Timmons has stated, “If we see more trade agreements, tax reform legislation and more regulatory certainty—as part of our comprehensive manufacturing strategy—manufacturers win. And when manufacturers win, America wins.”

What’s next: Even at full throttle—every machine running, every job filled—the industry can only produce 84% of the inputs necessary to meet demand. That means at least 16% of manufacturing inputs must be imported to grow domestic manufacturing. Stay tuned for a new proposal the NAM is announcing tomorrow morning.

Washington, D.C. – The National Association of Manufacturers released its Q2 2025 Manufacturers’ Outlook Survey, revealing that optimism among manufacturers across the country has dropped sharply. Only 55.4% of respondents report a positive outlook for their companies—a nearly 15-percentage-point drop from Q1 and the lowest level since the height of the COVID-19 pandemic in Q2 of 2020.

The survey conducted earlier this month revealed that 85.4% of manufacturers believe Congress should preserve pro-growth tax policies in response to trade uncertainty.

Trade uncertainty remained the top business concern for the second consecutive quarter, cited by 77.0% of respondents, followed by increased raw material costs, which was cited by 66.1% of respondents.

“These numbers are yet another indicator that manufacturers need increased policy certainty. Congress must act urgently to preserve tax reform and empower manufacturers to make the long-term investments that drive the American economy,” said NAM President and CEO Jay Timmons. “The stakes are high: preserving tax reform will prevent the loss of 6 million jobs and avoid a $1 trillion hit to the economy—that’s why manufacturers are calling on the Senate to preserve pro-manufacturing tax policies from the House-passed reconciliation bill, while also taking steps to ensure the final package is maximally beneficial for our industry. Pro-manufacturing tax policies are a critical component of a comprehensive manufacturing strategy; this quarter’s results also show that manufacturers need a strategic approach to trade policy that allows our industry to reduce costs and access the inputs we need to make things in America.”

The NAM releases these results to the public each quarter. Further information on the survey is available here.

-NAM-

The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs nearly 13 million men and women, contributes $2.93 trillion to the U.S. economy annually and accounts for 53% of private-sector rese arch and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org.