Trade

To thrive, create jobs and produce the essential goods the U.S. and our trading partners use every day, the manufacturing sector needs a fair, transparent Section 301 tariff exclusion process, the NAM said Tuesday.

• However, the tariff increases announced this week by the Biden administration could make it much more difficult for manufacturers to produce those critical items.

What’s going on: As part of the U.S. Trade Representative Office’s final Section 301 tariffs review—which the NAM had long urged the office to complete—President Biden said his administration plans to raise “tariffs on Chinese electric vehicles to roughly 100% … increas[e] a key tariff rate on steel and aluminum products to 25% from 7.5%,” raise the solar-cell tariff to 50% from 25% and create a new 25% duty on shipping cranes, according to Reuters (subscription).

• Section 301 of the Trade Act of 1974 authorizes the U.S. to act against foreign trade practices it believes violate agreements. The NAM has been pushing for a finalized report with a fair, transparent Section 301 tariff exclusion process that will both reduce the burden on manufacturers and keep pressure on China to adhere to fair practices.
• The process would allow manufacturers to ask for tariff exclusions for specific products they need.
• “The NAM has long advocated for a full global strategy and a rules-based trading system that benefit manufacturers and workers by opening new markets with our allies,” NAM President and CEO Jay Timmons said.

Why it’s important: Far from freeing the U.S. of “unacceptable risks” stemming from unfair Chinese trade practices, in the absence of a new exclusion process, these tariff increases could limit the ability of manufacturers in the U.S. to obtain needed supplies for goods production.

• This, in turn, could jeopardize U.S. jobs and competitiveness.
• “Manufacturers are concerned about the potential impact this broad swath of tariffs could have on our ability to produce the essential products needed to drive our economy forward, especially if critical inputs become less available and more costly,” said Timmons.

The background: The USTR is legally required to review Section 301 tariffs four years after they are initiated. This most recent review—started in May 2022—is overdue.

• The exclusion process the NAM has long requested allows manufacturers to ask for tariff exclusions for specific products they need.

What should be done: “Manufacturers urge the administration to negotiate new trade agreements with allies and partners around the world and create a new, comprehensive and transparent 301 exclusion process to ensure that manufacturing in America is not being disadvantaged by our own government,” Timmons concluded.

Washington, D.C. – Following the introduction of the Miscellaneous Tariff Bill Reform Act, National Association of Manufacturers Managing Vice President of Policy Chris Netram released the following statement:

“For more than three years, manufacturers—particularly small and medium-sized manufacturers—have been paying millions of dollars in higher prices for critical inputs due to the expiration of the Miscellaneous Tariff Bill. This legislation is a significant step forward for manufacturers, which are losing more than $1.3 million every day on products not available in the U.S.—more than $1.5 billion overall.

“Restoring the MTB would strengthen manufacturing here at home, giving our sector the ability to source raw materials and components that can’t be produced domestically at scale or at competitive prices.

“Historically, the MTB has always had bipartisan support, and we thank House Ways and Means Trade Subcommittee Chairman Adrian Smith for his leadership and efforts to introduce MTB legislation. We urge the House to act quickly so that we can get one step closer to getting this critical legislation to President Biden’s desk.”

-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 $2.89 trillion to the U.S. economy annually and accounts for 53% of private-sector research 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.

Washington, D.C. – Following the Biden administration’s announcement of new 301 tariffs targeting Chinese products in sectors including electric vehicles, solar equipment, semiconductors, batteries, medical equipment and critical minerals, National Association of Manufacturers President and CEO Jay Timmons released the following statement:

“Manufacturers are concerned about the potential impact this broad swath of tariffs could have on our ability to produce the essential products needed to drive our economy forward, especially if critical inputs become less available and more costly.

“The NAM has long advocated for a full global strategy and a rules-based trading system that benefit manufacturers and workers by opening new markets with our allies. But when countries play by their own rules and create distortions, the U.S. should consider the use of all legislative and enforcement tools.

“The expansion of manufacturers’ global reach through a more open and more fair global trading environment has been pivotal to expanding U.S. industrial production to record levels, enabling businesses of all sizes to raise wages and create more high-skilled U.S. jobs. That is why manufacturers urge the administration to negotiate new trade agreements with allies and partners around the world and create a new, comprehensive and transparent 301 exclusion process to ensure that manufacturing in America is not being disadvantaged by our own government.

“Politicians and policymakers on both sides of the aisle need to understand that we can’t instantly reshape supply chains that took decades to build—especially the supply chains that bring us vital inputs and components essential to our everyday lives.

“Additionally, to fully unleash the power of manufacturing in the United States, policymakers must also ensure that America maintains a competitive tax and regulatory regime that allows manufacturers to ramp up domestic investment; streamline the permitting process so that new facilities and energy and infrastructure projects will not be held up by red tape; grow the manufacturing workforce; and protect innovation. Together, these policies will help manufacturers create jobs, grow wages and expand exports to the 95% of customers who reside outside of our border.”

-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 $2.89 trillion to the U.S. economy annually and accounts for 53% of private-sector research 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.

The United Kingdom and United States have many things in common, but perhaps most important is their shared democratic values. These, along with sound trade policies on both sides of the pond, will help propel each respective nation forward.

• That was the main message conveyed during a business roundtable discussion between the NAM and its British counterpart association, Make UK, on Monday.

What went on: In attendance at the meeting at the NAM’s Washington, D.C., headquarters were a delegation of eight members of Parliament who sit on the Business and Trade Commission, British Embassy representatives and nearly two dozen U.S.- and U.K.-based manufacturers.

• The focus of the event—which came approximately a year after the NAM and Make UK signed a memorandum of understanding to collaborate on programming—was to explore ways to enhance the U.S.–U.K. trade and economic relationship. There is no free trade agreement between the U.K. and the U.S.
• The delegation, led by House of Commons Business and Trade Committee Chair Rt. Hon. Liam Byrne of the Labour Party, is also in the U.S. for talks with members of the Biden administration, Congress and the business community to discuss U.K. export growth and manufacturing strategy.

Why it’s important: In the absence of an official FTA between the U.S. and the U.K., the two nations must “be pragmatic about measures our businesses and our governments can take now that will help our economies grow, create jobs, innovate and prosper together,” NAM President and CEO Jay Timmons told the delegation.

• Make UK CEO Stephen Phipson CBE said event attendees all agreed that “as we move closer to our respective domestic elections this year and with the challenges to the framework of global trade continuing, [we must] lean into future bilateral cooperation on trade, innovation, energy and technology, [as well as] defense-sector cooperation.”

Policy talk: Roundtable participants discussed “big-ticket” legislation that has proved particularly important to manufacturers in recent years: the 2021 Bipartisan Infrastructure Law, the CHIPS and Science Act of 2022 and parts of the Inflation Reduction Act of 2022.

• The pro-growth elements in these measures “make our industry more competitive, empowering manufacturers to invest in new facilities and new equipment, expand production and to create jobs,” Timmons went on.

By the numbers: Continued good relations between the U.S. and the U.K. are key not just because of the shared belief in and commitment to democracy, but also because of the large role each nation plays in the other’s economy.

• The U.S. is the U.K.’s single biggest trading partner by country, having accounted for more than 16% of total trade in 2022.
• That same year, U.S. exports to the U.K. were $76.2 billion, an increase of 40% from prior years. Meanwhile, in 2022, American imports from the U.K. were $64.0 billion.

Come what may: Though the U.S. is fast approaching an important and widely anticipated presidential election, the country will stay committed to its relationship with the U.K. no matter who wins in November, Timmons told the delegation.

• “Regardless of the outcomes … we will remain resolved to strengthen our bonds and to do everything in our power to grow manufacturing competitiveness on both sides of the Atlantic.”

The NAM told the Office of the United States Trade Representative this week that it must use existing trade and investment tools to promote supply chain resilience for manufacturers in the U.S.

What’s going on: “Manufacturers and workers in the U.S. need USTR to undertake a proactive and competitive trade and investment policy that opens markets, eliminates barriers, enables the sourcing of necessary inputs and creates opportunities for inbound and outbound investment,” the NAM said Monday.

• The suggestions were in response to a USTR call for comment on “strategies that [will] advance U.S. supply chain resilience” (Federal Register).

What should be done: While manufacturers appreciate engagement with partners through frameworks such as the Indo-Pacific Economic Framework and the Americas Partnership for Economic Prosperity, the NAM encourages the government to “aggressively pursue ambitious agreements that include market access and the true removal of barriers to economic engagement with our partners.” The USTR can help manufacturers by:

• Adjusting or eliminating “current tariffs on manufacturers and ensur[ing] they are applied in such a way that creates a competitive environment for manufacturing in the U.S.”;
• “Negotiating more high-quality, modernized trade agreements with foreign partners” to remove trade barriers and address discriminatory measures; and
• Enforcing on-the-books trade agreements “to ensure that our trading partners are playing by the rules.”

Why it’s important: The aforementioned actions (and others) by the USTR would create “a competitive environment for manufacturers in the U.S. to succeed,” the NAM said.

The Office of the U.S. Trade Representative must revise its digital trade policy now to reassert American leadership, the NAM and more than 40 industry partners told the Biden administration ahead of U.S. Trade Representative Katherine Tai’s testimony this morning before the House Committee on Ways and Means.

What’s going on: In the past few years, the USTR has “retreat[ed] from digital trade protections,” the groups told National Security Adviser Jake Sullivan and National Economic Council Director Lael Brainard. Problematic actions/items by the USTR include:

• The October 2023 withdrawal of longstanding U.S. World Trade Organization positions that support the protection of cross-border data flows, stop data localization requirements, end discrimination against U.S. firms and their goods and services and protect sensitive data from bad actors;
• Abandonment of core U.S. policy priorities in the Indo-Pacific Economic Framework for Prosperity; and
• The omission in the USTR’s 2024 National Trade Estimate Report on Foreign Trade Barriers of numerous digital trade barriers, despite the statutory obligation under the Trade Act of 1974 to detail such barriers.

Why it’s important: These moves raise “deep economic and national security concerns,” the groups continued. They are in direct opposition to the interest of U.S. companies and their employees, and they give greater power to foreign nations, including China, “to write the rules that will govern the global digital economy for years to come.”

What must be done: The USTR must revise its stance on digital trade to “stand up for U.S. businesses and workers who face damaging digital trade barriers in foreign countries.”

The sixth ministerial of the United States–European Union Trade and Technology Council, held in Leuven, Belgium, emphasized the deepening cooperation between the U.S. and the EU in navigating global economic pressures and technological advancements.

What’s going on: Secretary of State Antony Blinken, joined by Secretary of Commerce Gina Raimondo and U.S. Trade Representative Katherine Tai, joined European Commission leaders in a discussion that centered on fostering economic security, the importance of AI governance, cooperation on secure supply chains and a transatlantic commitment to reducing reliance on high-risk suppliers.

• This collaboration, Secretary Blinken said in remarks to the press at the council’s outset, proved that there has been “increasing alignment” between the United States and the European Union on these and other issues in recent years.
• “Together, we represent almost half of world GDP, and that means that there’s a certain weight that comes with having a shared position on something,” Secretary Blinken said. “And whether that’s dealing with China or any other challenge, it makes a big difference.”

Growing collaboration in AI: The meeting additionally underscored unwavering support for Ukraine from the U.S. and the EU amid geopolitical challenges, as well as a commitment to driving innovation and security in technology and trade.

• One tangible outcome of the TTC was an update of the “Terminology and Taxonomy for Artificial Intelligence” (i.e., of the definitions of key terms used by the EU and U.S. when discussing AI). This underpins the workstream of the TTC to “ensure the safe, secure and trustworthy development and use of AI,” according to the U.S.–EU joint statement.

Shared concerns about Chinese semiconductors: Competition from heavily subsidized chips produced in China was a key focus at the ministerial, particularly in light of the anticipated ramping up of “legacy chips” manufactured in China over the next few years. The Chinese government’s significant financial subsidization of the chip-producing sector, Secretary Raimondo warned, could lead to considerable market imbalances between China and the U.S. and EU.

• Both the U.S. and EU pledged to continue working together to address destabilizing Chinese exports of semiconductors in the coming years, including to collect and share nonconfidential information and market intelligence about nonmarket policies and practices, to consult each other on planned actions and to potentially develop joint or cooperative measures to address distortionary effects on the global supply chain for legacy semiconductors.

As lawmakers consider proposals to scale back the de minimis treatment of low-value goods entering the U.S., the NAM and several of its partners are reminding stakeholders of the importance of having a streamlined, tariff-free customs entry process for such imports.

• These shipments are still subject to all U.S. laws and information requirements that enable enforcement at the border.

Last week, a group consisting of labor unions, select business associations and other stakeholders formed a coalition against certain de minimis imports, according to CNBC.  

A critical provision: The NAM and six allied groups pushed back, urging the White House to maintain the so-called “de minimis” import entry type, which permits goods valued at less than $800 to enter the U.S. in a streamlined manner and tax-free.

• “De minimis has benefitted thousands of American small businesses across all sectors,” said the groups. “For example, de minimis allows businesses to obtain inputs for domestically manufactured products into the United States more efficiently and with fewer unnecessary administrative requirements.”

• “It has also made purchasing goods online more affordable and accessible for consumers at a time of inflation and supply chain challenges. … The average value of a de minimis package is roughly $50. If de minimis were to be eliminated or significantly degraded … a $50 delivery could become a more than $100 delivery.” 

Combating disinformation: Proponents of eliminating or significantly degrading de minimis cite several concerns with the entry type that are unfounded, the NAM and its allies said.

• “There is no evidence that illegal products are more prevalent in de minimis shipments,” they went on, citing a CBP executive who refuted the false claim that de minimis shipments aren’t screened.
• When it comes to fentanyl, “[a]s government enforcement statistics make clear, the overwhelming majority of fentanyl enters the United States in large shipments from Mexico … smuggled in passenger vehicles, by pedestrians, and concealed in truck shipments. De minimis packages, on the other hand, arrive in the United States overwhelmingly by air transportation throughout the country.”
• Finally, eliminating the de minimis entry type would strain border control. “[D]egrading de minimis and routing one billion shipments into more resource intensive processing streams would require tens of thousands of CBP personnel to process information that is not related to enforcement and collect duty, rather than spending that time on activities that would actually interdict illicit items.”

Other solutions: The letter urges the administration to consider “practical, innovative ways to improve de minimis without increasing costs for consumers and small businesses.”

• Customs and Border Protection should use the authority it already has to build on existing enforcement of U.S. trade laws at the border by separating the vast universe of compliant shipments from illicit packages.
• This can be done through a rulemaking to formalize ongoing tests that require additional information on low-value shipments, closing information sharing gaps and employing a more “future proof” approach to include the use of technology.

Washington, D.C. – Following the completion of the 13th World Trade Organization ministerial meeting in Abu Dhabi, at which WTO members chose not to expand the agreement on the Trade-Related Aspects of Intellectual Property Rights waiver to include diagnostics and therapeutics, National Association of Manufacturers President and CEO Jay Timmons released the following statement:

“Global leaders at the WTO heard manufacturers’ stark warnings that an expansion of the TRIPS waiver would have endangered manufacturers’ fundamental ability to fight global crises, including COVID-19. Granting this waiver also would have emboldened our global competitors, chipped away at American innovation and jeopardized our ability to fight future diseases. After years of NAM advocacy, this decision represents a major victory for manufacturers—particularly those hard at work developing lifesaving cures and treatments. We appreciate President Biden and Ambassador Tai’s leadership to secure this outcome.”

The NAM led advocacy efforts to alert policymakers to the danger of an expanded TRIPS waiver, weighing in directly with the Biden administration, members of Congress, foreign governments and business organizations and urging Washington to stand with manufacturers. Timmons also took this message directly to WTO Director-General Ngozi Okonjo-Iweala during a March 2023 meeting in Geneva, Switzerland.

“Another welcome action was WTO members’ decision to expand the moratorium on e-commerce tariffs,” Timmons added. “The e-commerce moratorium has enabled the digital economy to flourish, and the NAM urges U.S. trade officials to push for permanently instituting the moratorium at the WTO, so that this critical element of digital commerce doesn’t come with an expiration date.”

-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 $2.85 trillion to the U.S. economy annually and accounts for 53% of private-sector research 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.

Phoenix, AZ. In advance of the White House meeting with President Biden and congressional leadership, National Association of Manufacturers President and CEO Jay Timmons, NAM Board Chair and Johnson & Johnson Executive Vice President and Chief Technical Operations & Risk Officer Kathy Wengel and NAM Board Vice Chair and Rockwell Automation Chairman and CEO Blake Moret released the following joint statement:

“For the strength of our democracy here at home and the protection of democracy around the world, manufacturers are calling on Congress and President Biden to act swiftly to keep the government open, pass pro-growth tax provisions, secure our border and approve urgently needed aid for Ukraine.

“Two years ago, the NAM Board unanimously passed a resolution ‘stand[ing] with the people of Ukraine in their fight to preserve freedom and independence.’ Last year, President Volodymyr Zelenskyy spoke to the NAM Board of Directors in an address to the American business community, where he underscored that ‘democracy is stronger than tyranny’ and reminded us of the importance of standing firm for our shared values.

“With time running short, manufacturers are looking to our leaders to act. They can address all of these priorities. In fact, they must address them all—for the future of our industry, the security of our country and the defense of democracy.”

Timmons echoed this message in remarks to the NAM Board this afternoon.

BACKGROUND:

On March 8, 2022, the NAM Board of Directors passed a resolution “stand[ing] with the people of Ukraine in their fight to preserve freedom and independence” and “reaffirm[ing] the commitment of this association and our industry to sustaining and safeguarding democracy and democratic institutions not only here at home, but also abroad.”

On Jan. 24, 2023, the NAM and the Ukrainian League of Industrialists and Entrepreneurs signed a Memorandum of Understanding to formalize manufacturers’ commitment to supporting Ukraine, and the NAM and its member companies participated in a “Rebuilding Ukraine” roundtable with Ukrainian manufacturers and senior Ukrainian government officials.

Then, in March 2023, the NAM traveled to Belgium, France, Germany, Poland, Switzerland and the United Kingdom for a series of meetings with international officials, government ministers, ambassadors, business association leaders and NAM member companies to strengthen alliances and underscore at every opportunity our support for Ukraine and democracy more generally.

-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 $2.85 trillion to the U.S. economy annually and accounts for 53% of private-sector research 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.