Trade

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.

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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.

U.S. competitiveness on the world stage, trade agreements, intellectual property, democracy and regulatory certainty—these were just some of the topics NAM President and CEO Jay Timmons covered in a Tuesday interview with POLITICO’s Doug Palmer during the 2024 Washington International Trade Conference.

• The meeting was attended by senior U.S. trade officials and foreign ambassadors and hosted by the Washington International Trade Association in Washington, D.C.

Safeguarding IP: With the World Trade Organization’s 13th Ministerial Conference coming up later this month, Timmons discussed the damage that would result from one of the meeting’s expected agenda items: an expansion of a 2022 TRIPS waiver on IP rights to include COVID-19 therapeutics and diagnostics.

• “Intellectual property is truly the lifeblood of manufacturing,” said Timmons, who met with WTO Director-General Dr. Ngozi Okonjo-Iweala and WTO Deputy Director General Angela Ellard in Geneva last March to discuss the waiver.
• Manufacturers “work hard, and it’s always been kind of a given from the U.S. perspective that intellectual property protections would be front and center. … Obviously, we want to facilitate the growth of manufacturing in other areas of the world, too. But … [it] is a giant leap too far if therapeutics and diagnostics are included in the waiver.”
• American agreement to the expanded waiver, Timmons said, would be tantamount to the federal government telling manufacturers in the U.S., “By the way, we want you to invest in developing more innovations here in this country if we’re just going to turn around and give them away.”

 Trade and tariffs: If the U.S. wants to remain competitive, we must negotiate a trade agreement now—and pass the Miscellaneous Tariff Bill, Timmons told Palmer.

• “Trade is really the recipe for peace and the recipe for working together harmoniously,” he said. “We’d like to see more trade agreements. We haven’t seen one negotiated here in the United States for over 10 years—and the rest of the world, quite frankly, is eating our lunch when it comes to negotiating these agreements.”
• The U.S., which has been operating without an MTB for more than three years, “need[s] MTB to not just meet our economic goals and not just feed the supply chains of manufacturers, but also to meet our national security objectives.”

Democracy vs. autocracy: Timmons—who last July led the American business community delegation to Cancun, Mexico, for meetings ahead of the third U.S.–Mexico–Canada Agreement “Free Trade Commission”—stressed the importance of the USMCA to underpinning democratic values worldwide.

• “This agreement is incredibly important to our national security, and it is important to our place in the world,” Timmons continued. “We need to expand the relationship, whether it’s trade or other relationships here in North America, and we need to embrace the relationships and our allies around the world—in Europe and Australia and New Zealand and Japan and other areas—because we are facing a choice … between free market economies and democracies and command economies and autocracies, and I want to strengthen the former, not allow the latter to bloom.”

Other needs: Timmons talked about other manufacturing priorities for the current administration and the next.

• “We need regulatory certainty that gives business leaders the ability to plan for the future,” he said. “We [also] need to invest in workforce incentives. All of those and infrastructure, which we have done, and we continue to do. You can’t just open up the trading system and not expect capital to flow outside of our borders if you don’t have the right policies internally.”

NAM in the news: Read POLITICO Pro’s coverage of the conference and Timmons’ interview here and here.

This holiday season, instead of overstocking shelves with merchandise, retailers “have pared back their inventories while trying to focus their supply chains more tightly on products that shoppers want,” The Wall Street Journal (subscription) reports.

What’s going on: “Many retailers have spent much of the year working through the stockpiles from last year and now say they have cleaned up their distribution centers and their balance sheets.”

• After the global pandemic, sellers bulked up their stocks in case of another major supply chain disruption—but it was a “strategy that left many companies saddled with goods.”

A different holiday season: Owing to high inflation and more spending on services than goods, “[h]oliday retail sales in the U.S. are expected to grow at a slower rate this year.”

• “The National Retail Federation predicted sales will rise between 3% and 4% over 2022 to between $957.3 billion and $966.6 billion. Last year, holiday sales grew 5.3% to $936.3 billion.”

​​​​​​​ What they’re doing: Retailer strategies for this year include paying close attention to consumer trends and offering “variety [over] redundancy.”

• Said one retailer’s CEO, “The customer today does not want an endless aisle. They want the best aisle.”

The Bridge of the Americas in South-Central El Paso, Texas—one of the largest land ports for U.S.–Mexico trade—restarted commercial operations on a limited schedule yesterday, according to a notice from U.S. Customs and Border Protection.

• It’s a development that the NAM advocated, having engaged in continued talks with the Biden administration and relevant agencies since cargo movement was suspended last month.  

What’s going on: The port of entry reopened at 6:00 a.m. Tuesday and closed at 2:00 p.m., a schedule it will keep temporarily each week Monday through Friday.

• In recent weeks, large numbers of migrants have crossed the Texas–Mexico border, and the CBP stopped commercial movement along the Bridge of the Americas so federal customs agents could assist with the influx.

Why it’s important: “The temporary bridge closure and the Texas Department of Public Safety’s (DPS) enhanced safety truck inspections at El Paso’s two other truck ports of entry have drastically slowed cargo truck crossings in recent weeks between El Paso and Juárez, Mexico,” according to the El Paso Times on MSN.

• Last week, the value of goods in thousands of trucks backed up on the Mexican side of the border “had surpassed $1.5 billion,” according to a source cited by Reuters (subscription).
• Prior to the temporary closure, the bridge had been processing approximately 500 northbound trucks a day, according to the El Paso Times.

The NAM says: “Mexico is the largest trading partner of the U.S. and facilitating trade between the two countries is vital to manufacturers’ operations,” said NAM Director of Trade Facilitation Policy Ali Aafedt. “The NAM will continue to share the impacts of the disruption with the federal government and urge solutions to resolve the continuing backlog.” 
 

During meetings this week, the U.S. and China attempted to restore high-level bilateral interactions and reverse the tension growing between the two nations, according to The Wall Street Journal (subscription).

What’s going on: “During two days of meetings in Beijing, [U.S. Secretary of State Antony] Blinken and senior Chinese foreign-policy officials agreed to more high-level talks, continuing a thaw after months of near-frozen contacts.”

• “They also promised to find common ground on increasing flights between the two countries and combating the flow of fentanyl into the U.S.”

The background: In recent months, U.S.–China relations have been on a downward trend, following U.S. detection of what the Biden administration said was a Chinese spy balloon.

• Last year, the U.S. imposed restrictions on the export of certain advanced technology to China and is expected to issue new limits on U.S. investments overseas.
• China has taken issue with these moves, as well as with U.S. support for ally Taiwan.
• Some 67% of Americans say China is a “major threat” to the U.S., according to a Pew Research Center questionnaire. That’s up from 43% in 2015.

Topics discussed: During his visit, Blinken raised a number of issues, including tensions over Taiwan and North Korean aggression. He also discussed China’s trade-distorting practices, human rights violations, imprisonment of U.S. citizens and position on Russia’s war against Ukraine, according to POLITICO.

• The meetings also touched on areas of mutual interest, including climate, macroeconomic stability, food security and public health.

What didn’t happen: Blinken’s visit to China—the first by a U.S. cabinet member in more than four years—did not produce substantive advancement on the above issues. However, the meeting served as a starting point for future high-level communications.

• Officials did not address Chinese intelligence movements in Cuba or the establishment of “a military communication channel between the countries to address frequent incidents around Taiwan … a key goal of the Biden administration.”

​​​​​​​Business with China: “Blinken said he also met with members of the U.S. business community on Monday, many of whom expressed a desire to continue to grow their operations in China,” according to POLITICO.

• “He said a full decoupling of the American and Chinese economies would be disastrous, pointing to record trade between the two last year, but said the U.S. would continue to take steps to make American supply chains more resilient and deny China technologies that threaten U.S. national security.”

The Panama Canal—which “handles about one-third of Asia-to-Americas seaborne trade”—is at its lowest level in more than 100 years, a development that could jeopardize global supply chains, according to The Wall Street Journal (subscription).

What’s going on: “The government agency that manages the artificial waterway implemented travel restrictions in May to avoid ships running aground, and since then, some large vessels have had to reduce container loads by roughly one-quarter. Further restrictions could go into effect in late June, authorities say.”

• In the first five months of 2023, rainfall in the canal area was 47% below the historical average.
• The canal, which opened in 1914, depends heavily on rainfall to replenish the tens of millions of gallons of water that flow into the sea each time a ship goes through the canal’s locks.

Why it’s important: “Disruptions in the canal’s operations would hurt Southern Hemisphere exporters and importers in the north. Brazilian meat, Chilean wines and bananas from Ecuador are routinely shipped across the canal, along with copper from Chile and liquefied natural gas from the U.S. Gulf Coast.”

• Panamanian officials are trying to avoid a repeat of the problems that afflicted the Suez Canal in March 2021, when a large containership blocked that waterway for nearly a week, costing billions of trade dollars.

The fallout: “In addition to cutting cargo loads, shipowners are adjusting to Panama Canal restrictions by moving containers to trains to ensure safe passage through locks. In some instances, boxes are unloaded from ships on the Pacific Ocean side of the canal, moved by rail and returned to ships before they continue their voyage through the Atlantic Ocean.”

• The Panama Canal Railway has seen a 20% increase in cargo volume as a result of the drought.
• Shipowners are responding by charging an average of $600 more per box on vessels that cross the canal.
• The daily Asia–U.S. East Coast freight rate was $2,400 per container in May, according to Freightos Baltic Index, but it is expected to rise this month partly due to the drought surcharge.

What’s next: Large container shipping companies “have no plans to divert ships away from Panama”—for now. “[E]xecutives said it could happen if drought conditions persist.”

Commerce Secretary Gina Raimondo met with Chinese Commerce Minister Wang Wentao Thursday evening to talk “trade, investment and export policies” in the first Cabinet-level discussion between the two nations in months, Reuters reports.

What happened: The officials “had candid and substantive discussions on issues relating to the U.S.–China commercial relationship, including the overall environment in both countries for trade and investment and areas for potential cooperation,” the Commerce Department announced in a readout of the sit-down.

• “Secretary Raimondo also raised concerns about the recent spate of [People’s Republic of China] actions taken against U.S. companies operating in the PRC,” including an uptick in investigations against these companies’ China operations.
• Wang—who is also confirmed to meet today with U.S. Trade Representative Katherine Tai—voiced concerns over some of the Biden administration’s China policies, “including on semiconductors, export controls and reviews of foreign investments, a Chinese Commerce Ministry statement said,” according to Reuters.
• Both meetings are taking place on the sidelines of U.S.-hosted meetings at the Asia-Pacific Economic Cooperation organization happening this week in Detroit.

What they agreed: Raimondo and Wang said they would begin and maintain open communication, which China’s Commerce Ministry said would let the two countries discuss specific trade and cooperation matters.

Additional background: Earlier this week, Wang met with U.S. firms, with whom he stressed “the importance of the China market for American companies,” reports the South China Morning Post (subscription).

Why it’s important: Thursday’s Raimondo–Wang exchange comes after President Biden and other G7 leaders “said they would ‘de-risk’ without ‘decoupling’ from the world’s second-largest economy in everything from chips to minerals,” according to Reuters.

Washington, D.C. – Today, the National Association of Manufacturers and Make UK hosted a meeting at NAM headquarters where they formalized manufacturers’ commitment to supporting close economic ties between the United States and United Kingdom. Make UK CEO Stephen Phipson and NAM President and CEO Jay Timmons signed an updated memorandum of understanding, which will serve as a roadmap to the cooperation between the two organizations and outlines the key goals and objectives for the partnership.

“The NAM and Make UK have such a strong, special relationship, just as the U.S. and the UK do, and we must continue to deepen that partnership and the commercial and economic ties between our countries,” said Timmons. “Cooperation between American and British companies not only makes our economies stronger, but also strengthens the transatlantic strategic alliances to support the rule of law, freedom and opportunity from those who threaten our shared values. Especially with Russia’s continued assault on Ukraine, it is critical that we unleash the power of commerce to preserve, protect and expand democracy.”

The MOU calls for Make UK and the NAM to work together to provide opportunities for their members to strengthen manufacturing through a number of avenues, including exploring potential trade delegations, trade fairs and business networks; facilitating visits and economic delegations between representatives of the two organizations for promoting trade, investment and commercial exchanges among member companies and organizations; and working together on joint meetings, conferences, seminars, reports, letters and mutually agreed advocacy on trade and investment-related issues.

“Make UK is delighted to have further strengthened our partnership agreement with our American counterpart, the National Association of Manufacturers, as we focus increasingly on boosting cross-Atlantic trade,” said Phipson. “In recent months, we have agreed to a process of even broader sharing of market intelligence, data and policy work, facilitating visits for economic delegations to visit on both sides of the Atlantic to unlock new trading opportunities.

“We will continue to work ever more closely as we look to cement commercial exchanges and opportunities for shared promotion as we build on the ties that have connected our two nations for generations. Relations with the U.S. are vital, and its market is the second-most important for UK goods. In a post-Brexit world, it is likely to assume ever greater importance as part of our efforts to boost global trade.”

Click here to view the full text of the MOU.

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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 $2.90 trillion to the U.S. economy annually and accounts for 55% 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.

As the Group of Seven summit begins in Hiroshima, Japan, today, President Biden is expected to announce new sanctions on Russia, according to The Wall Street Journal (subscription).

• President Biden’s goal at the summit is likely to be reinforcing the allies’ support of Ukraine as well as their economic defenses against Chinese power.
• This is the summit’s 48th year. The G7 comprises the U.S., Canada, Britain, France, Germany, Italy and Japan.

The details: “The new U.S. sanctions and trade restrictions target goods and services vital to Russia’s military-industrial complex, said a senior Biden administration official who briefed reporters shortly after the president landed in Hiroshima.”

• “They are also aimed at Russia’s ability to extract the oil and natural gas critical to the country’s economy, the official said. Other Western allies will roll out similar new programs, officials said.”

The big picture: Analysts say President Biden—who canceled several international meetings planned for next week to return to Washington for debt talks—faces a difficult task at the meeting: “convincing allies that the U.S. can keep its economic house in order while moving forward on Russia and China,” according to another Journal article (subscription).

The NAM’s moves: During the NAM’s recent “Competing to Win” Tour in Europe, NAM President and CEO Jay Timmons hammered home manufacturers’ support for Ukraine.

• “[T]he most important thing is to support our allies that believe in democracy,” Timmons said during a live Morning Joe interview from Warsaw, Poland. “And American business, I think, can help lead the way to strengthen and support democracy.”

Read more about the NAM’s Competing to Win Tour here, here and here.
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The NAM wrapped up its “Competing to Win” Tour in Europe with key meetings in Brussels and Paris, cementing important partnerships and building consensus on the imperative to strengthen U.S. alliances with European nations. It also advocated policies that will enable manufacturers to withstand geopolitical risks and threats to global stability.

Brussels power meetings: In Brussels, the epicenter of EU political activity, NAM President and CEO Jay Timmons met with a who’s who of experts deeply involved in trade and economic policy. He touched on a wide range of priorities including free trade agreements, permitting reform in the United States, IP, energy security and regulatory certainty.

• Timmons met with top trade policy leaders in the EU, including Tomas Baert, a trade adviser to European Commissioner Ursula von der Leyen, and Member of European Parliament and Chairman of the Trade Committee Bernd Lange.
• The team also met with BusinessEurope, led by Director General Markus Beyrer and Deputy Director General Luisa Santos, and participated in a roundtable organized by BDI Brussels Head of Office Heiko Willems. The roundtable also included some of BDI’s leading German member companies.

Evening event: The finale of the day in Brussels was a reception co-hosted by NAM Council of Manufacturing Associations member Distilled Spirits Council at the residence of U.S. Ambassador to the EU Mark Gitenstein.

• Timmons and NAM Vice President for International Economic Affairs Ken Monahan discussed the U.S.-EU relationship and the NAM’s priorities with key EU leaders on trade, including European Parliament members Reinhard Hans Bütikofer and Radek Sikorski.

French connection: In France, Timmons met with the ardent champion of manufacturing Benoit Bazin, chief executive officer of Saint-Gobain, one of the world’s largest building materials companies and the manufacturer of innovative material solutions. In North America, Saint-Gobain has approximately 150 locations and more than 15,000 employees.

• The NAM also visited AmCham France. Managing director Eglé de Richemont said following the meeting: “Today, AmCham France had the privilege to welcome three top representatives from the [NAM] to discuss over key themes, including the importance of close economic partnership between the U.S. and France, the criticality of resilient manufacturing in the U.S., France and across Europe and the importance for manufacturers of standing with Ukraine now and tomorrow for the rebuilding of the country.”

The final word: After meeting with other manufacturers on the final leg of his tour, Timmons remarked “We’ve been hard-charging now for almost two weeks, and it’s truly inspiring how unified our partners across the Atlantic are in their solidarity with Ukraine and in meeting this moment with not just talk but also action. We’re just getting started.”