Transportation and Infrastructure

A labor strike on the U.S. East and Gulf Coast strike would have dire consequences for the maritime supply chain, the NAM and partner organizations told the Biden administration this week—which is why it’s vital the administration intervene now to restart stalled labor negotiations between dockworkers and an alliance of port operators and ocean carriers.

What’s going on: “Earlier this month, contract negotiations broke down between the International Longshoremen’s Association and the US Maritime Alliance,” Bloomberg Government (subscription) reports. “The current agreement, which covers about 45,000 dockworkers at facilities including six of the 10 busiest US ports, expires Sept. 30.”

• The NAM and more than 150 other industry organizations on Wednesday urged the administration to “immediately work with both parties to resume contract negotiations and ensure there is no disruption to port operations and cargo fluidity.”

Why it’s important: Other global shipping-related setbacks and threats mean the U.S. cannot withstand another challenge, the groups said. Continued Houthi terrorist attacks on commercial ships in the Middle East have resulted in “congestion and lack of equipment at overseas ports, carrier capacity issues as they continue to divert vessels away from the Red Sea and increased freight rates.”

Precedent set: Last September, after 14 months of negotiations and several work stoppages and walkouts, West Coast dockworkers reached a labor agreement with the Pacific Maritime Association—following NAM-urged intervention by the Biden administration.

• “We witnessed a significant shift of cargo from the West Coast to the East Coast and Gulf Coast ports because of the challenges and uncertainty during the last West Coast port labor negotiations,” said the groups. “While much of that business has remained at the East Coast and Gulf Coast ports, we are starting to see a shift back to West Coast gateways, where a long-term contract is in place, especially as we enter the busy peak shipping season.”

It’s not every day that an international company meets an ambitious sustainability goal two years early. But last May, that’s exactly what happened at 119-year-old transportation logistics provider C.H. Robinson.

• The goal under discussion: a company-wide reduction in intensity of Scope 1 and 2 emissions—those emissions generated by the company’s own operations—of 47% (more than the 40% targeted). C.H. Robinson had previously calculated meeting the objective by 2025.

Simple but effective: “Most of it was looking at where we could find inefficiencies” and correcting them, said C.H. Robinson Vice President of Environment, Social and Governance Rachel Schwalbach. Some changes came from suggestions “our own employees brought forward: LED lighting, responsible use” of electricity.

• Efforts also included a marked increase in the company’s use of renewables generally. From 2019 to 2023, C.H. Robinson renewable-energy purchases rose 40%.

Not an either/or proposition: The Eden Prairie, Minnesota–based company—which solves logistics challenges for clients through freight forwarding and other innovative transportation solutions—is proof positive that businesses don’t have to choose between good environmental stewardship and profitability.

• In fact, “sometimes the sustainable option is actually the less expensive option,” Schwalbach told the NAM. “C.H. Robinson is working with suppliers every day to drive out waste, and often that’s been because we’ve looked at it through a lens of cost savings or time reduction. Now it’s also through the lens of sustainability.”
• What’s more, “if you’re approaching sustainability right, it should be tied to your overall business strategy. Sometimes it’s as simple as making sure you’re compliant with rules and regulations” as you meet sustainability requirements.

A competitive advantage: Reducing the footprint of operations can be a competitive advantage for manufacturers, too.

• “We get asked about sustainability by nearly all our stakeholders, so it really has to be a part of strategic decision making across the business,” Schwalbach continued. “Our shippers are also getting asked about [sustainability] by their investors and customers. People across the business are thinking about it, so it’s [to our advantage to] make sure it’s integrated across all areas.”

No business is an island: Businesses must keep in mind that sustainability is a shared interest, and the environment’s health is best served by teamwork, not isolated efforts, according to Schwalbach.

• “As companies continue to put big [sustainability] goals out there, I cannot emphasize enough the need for collaboration across industries, as clichéd as it sounds,” Schwalbach said. “Having people who are willing to come to the table and say, ‘Hey, let’s figure this out together,’ is going to be pretty critical.”
• For C.H. Robinson, that means engaging with customers, carriers and a broad range of other stakeholders.

Supporting climate-friendly practices: The right moves by policymakers can also help support the private sector’s sustainability efforts.

• “As we’re looking increasingly at alternative fuels and electric vehicles here in the U.S., we need an electric grid that can support the transition to a lower-carbon economy,” Schwalbach said. “Continuing to invest in [strengthening] the grid will help us invest in the right technologies. We need to be able to move forward quickly in a way that doesn’t cause disruption to the supply chain and transportation.”
• Companies want clarity around regulations, too. “There are so many [regulations] coming out right now, and companies want to know, ‘How do I get the right [climate-related] data? How do I make sure the data are accurate?’”

In for the long haul: So what’s next for C.H. Robinson? A continued focus on conservation, for one thing.

• “You meet your goals, and that’s really exciting, but there’s no time to sit around,” Schwalbach said, adding that the company is now in the process of figuring out “what new sustainability goals will look like for carbon reduction.”
• Ultimately, those goals will be met by ensuring a commitment to the environment remains a company-wide focus, she told us.
• “Doing sustainability well means it’s integrated. C.H. Robinson is a 119-year-old company, and sustainability is about making sure we’re going to be successful for another 119 years.”

In recent years, an American household company name has been helping keep Ukraine’s nuclear reactors running (The Wall Street Journal, subscription).

What’s going on: After Russia’s invasion in 2022, Ukraine stopped buying nuclear fuel from Moscow, formerly its top supplier. That’s when Westinghouse Electric stepped in.

• The Pennsylvania-headquartered company “now makes fuel bundles that are compatible with all of the country’s [Soviet-designed VVER] reactors and is working on a plan that could allow Ukraine to start making some of that fuel itself. Ukraine also plans to build nine Westinghouse-designed reactors.”

Why it’s important: The change is a victory for the West, “which has long sought to erode Russia’s dominance in the industry and the political influence that comes with it.”

• Russia has about 44% of the world’s uranium-enrichment capacity, which is critical because nuclear reactors use uranium for power production.

A decade in the making: After Russia seized Crimea in 2014, Ukrainian state nuclear company “Energoatom ramped up purchases of Westinghouse’s fuel assemblies and, by the beginning of 2022, six of Ukraine’s 15 reactors had been loaded with fuel from the company.”

• The firm also began supplying Ukraine with fuel assemblies for the VVER-440 reactor, of which the country has two.

A critical moment: As part of its full-scale invasion of Ukraine two years ago, Russia occupied the country’s largest nuclear power station, Zaporizhzhia, and attacked other energy infrastructure.

• Energoatom had to move fast to maintain deliveries of Westinghouse’s VVER-440 fuel, without which one of Ukraine’s nuclear reactors might need to be shuttered, worsening an electricity shortage.
• “What followed was a high-stakes race to make the fuel and load it in a reactor near the western Ukrainian city of Rivne, which faced occasional aerial bombardment despite being far from the war’s front line.”
• Westinghouse raced to source new machinery and rework its factory floor in Sweden, “upending traditional ways of working in a tightly regulated sector that is better known for its glacial pace.”

How it succeeded: The company set up a 60-person task force to meet and identify potential bottlenecks in production and launched talks with other European utilities.

• It got the Czech Republic and other countries with VVER-440 reactors “to accept the same basic fuel assembly design as the one Westinghouse was planning to use for Ukraine—a step officials said helped speed up production because it eliminated some of the time the company would usually spend on customization.”
• Utilities in five countries, including Ukraine, have since signed deals with Westinghouse for fuel deliveries.
• Experts from Energoatom went back and forth between Ukraine and Sweden to help with the fuel development, and in September, the new fuel assemblies were ready.

A nuclear future: To produce the fuel, Westinghouse purchased new manufacturing equipment, repurposed older equipment and 3-D printed some detailed components.

• “Westinghouse delivered a first batch of VVER fuel to a nuclear power plant in Bulgaria this spring and has said a delivery to the Czech Republic should take place this year.”

Washington, D.C. – Today, the National Association of Manufacturers, joined by the American Chemistry Council, filed a petition in the D.C. Circuit Court of Appeals challenging the Environmental Protection Agency’s final rule setting individual standards for six per- and polyfluoroalkyl substances, also known as PFAS, in municipal water systems.

“Manufacturers support commonsense regulations on PFAS that recognize the criticality of these substances across several industrial sectors—for many of these critical applications, there are no viable alternatives,” said NAM Chief Legal Officer Linda Kelly. “What the EPA did, however, was to bulldoze ahead with standards that set an acceptable level for PFAS at near zero—which is wholly infeasible and threatens these vital substances’ continued application in manufacturing processes. In doing so, the EPA relied on a deeply flawed cost-benefit analysis and failed to follow the clear-cut statutory procedures required by the Safe Drinking Water Act, among other substantive and procedural deficiencies. The NAM Legal Center is filing suit to overturn this unachievable standard and protect manufacturing operations and jobs across the country.”

PFAS are a diverse group of chemicals essential to modern life, including in the transformers used to power electric grids; in the semiconductors and solar components needed for clean energy transition; and in the aircraft, munitions, fire suppression systems and communication devices required for national security.

-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 demand for copper is skyrocketing—and global mining company Rio Tinto is powering forward full throttle to meet it (CNBC).

What’s going on: “The red metal, considered a barometer for economic health, is a vital component for the construction and defense industries as well as a key component in electric cars, wind turbines and the power grid.”

• However, current mines and in-the-works projects “will meet only 80% of copper needs by 2030, according to the International Energy Agency.”
• “There’s this growing consensus that demand fueled by the energy transition is going to outstrip supply, and that’s why analysts say we are simply not going to have enough of it,” said CNBC Markets Reporter Pippa Stevens in a recent CNBC video. “And copper really is the backbone of decarbonization goals.”

The challenges: Copper mining is difficult and expensive—and it takes 10 to 15 years to build each mine, Rio Tinto CEO Bold Baatar told CNBC.

A beneficial metal: Copper is the most economical conductor available, and directly and indirectly, it supports more than 395,000 U.S. jobs and more than $160 billion in economic output.

Behind the scenes: CNBC went behind the scenes at Rio Tinto’s Kennecott operations in Utah, where “about 200,000 metric tons of copper are produced annually.”

• There, Rio Tinto is increasing its open-pit mining operations and has started an underground project to mine higher-grade ore.
• Kennecott is unique for its smelter and refinery, “where the ore is processed into almost pure copper.”

Permitting challenges: Another of Rio Tinto’s projects, the Resolution Copper mine in Arizona, has the potential to power up to 25% of U.S. copper demand—but it has been mired in a regulatory morass for the better part of two decades.

• “The last hard-rock mine that was permitted was in 2008,” Rio Tinto Copper Chief Operating Officer Clayton Walker told the news outlet. “We’ve been working on the Resolution Mine for about 18 years.”

Independence is possible: “Theoretically, there are enough reserves in the U.S. that we could become independent for our copper needs,” Walker continued. “It’s just, how do we do that? How do we get the permits?”

What the NAM is doing: The NAM has been engaging directly with the Biden administration and members of Congress through meetings and briefings at NAM headquarters to push for comprehensive permitting reform.

• In addition, the NAM, along with members of the NAM’s Council of Manufacturing Associations and Conference of State Manufacturers Associations, last summer launched Manufacturers for Sensible Regulations, a coalition that seeks to speed up the frequently slow, arduous federal permitting process for energy infrastructure projects and address the large number of regulations being churned out by the federal government.

Federal tax credits that have long been available for solar and wind energy projects may soon also be available for other renewables initiatives, such as nuclear fission and fusion (Reuters, subscription).

What’s going on: On Wednesday, “[t]he Treasury Department announced its guidance for Clean Electricity Production Credits and Clean Electricity Investment Credits, created under the 2022 Inflation Reduction Act, that will be available in 2025 as the previously available wind and solar production and investment tax credits sunset.”

• The Biden administration’s proposal identifies several technologies that will be eligible for the credits, including nuclear fission and fusion, marine and hydrokinetic energy, hydropower and geothermal.
• Public comments on the proposal will be accepted through Aug. 2, and a public hearing is scheduled for Aug. 12 and 13 (Law360, subscription).

The NAM says: “Expanded eligibility for these tax credits is a key to getting more industries involved,” said NAM Director of Energy and Resources Policy Michael Davin.

The U.S. tax code is a keystone of our nation’s economic competitiveness, Erie Molded Packaging President Tom Tredway told the House Ways and Means Tax Subcommittee at a field hearing on Monday. But pro-growth tax provisions have begun expiring, with more tax increases on the way next year—so that keystone has started to crack, “weakening the entire structure” of the country.

What’s going on: Tredway gave testimony at a hearing in his hometown of Erie, Pennsylvania, the namesake of his 42-year-old, family-owned custom injection molded parts and packaging solutions company.

• Tredway told Ways and Means Committee Chairman Jason Smith (R-MO), Tax Subcommittee Chairman Mike Kelly (R-PA) and others of the negative effects his business has seen since the expiration of three provisions from the 2017 Tax Cuts and Jobs Act: immediate expensing for domestic research and development, enhanced interest deductibility and full expensing.
• And Tredway put the committee on alert: additional TCJA expirations are scheduled for the end of 2025, and small manufacturers “will be disproportionately harmed” by congressional inaction to preserve these vital policies.

A winning formula: The expired provisions—as well as other, soon-to-expire measures—were like rocket fuel for manufacturers and the rest of the economy.

• “In the years following TCJA, Erie Molded was able to invest nearly $7 million in new capital equipment purchases thanks to full expensing,” Tredway said. “Along with this much-needed equipment, we were able to create new positions across our team, and we were able to deliver higher quality products faster to our customers.”

​​​​​​​But now… Tredway’s company has had to delay important equipment purchases, and last year, its taxable income “was almost six figures higher” than Tredway had anticipated.

• What’s more, when the 20% pass-through deduction—currently taken by companies in which profits pass through to the owner and are thus taxed at the individual rate—expires at the end of 2025, Erie Molded Packaging will see another tax hike it can ill afford, “severely hampering [the company’s] growth trajectory.”

​​​​​​​What should be done: Congress must pass the Tax Relief for American Families and Workers Act as soon as possible—and act to prevent tax hikes in 2025, Tredway told those at the hearing.

• “I urge every member of this committee to preserve these and the other pro-growth provisions, which allow manufacturers to function as the backbone of our economy and compete on a global scale.”

Former Assistant U.S. Trade Representative for World Trade Organization and Multilateral Affairs Andrea Durkin has joined the NAM as vice president of international policy, the NAM announced Monday.

An experienced leader: “Andrea brings a wealth of expertise to the job, with more than three decades of service in both the public and private sectors,” NAM President and CEO Jay Timmons said. “As a leader in international trade negotiations, her deep understanding of international policy will enhance the NAM’s strategic objectives significantly as we continue to build off of successful engagements with our counterparts across Europe and the North American continent.”

• Durkin is a foremost U.S. expert on international policy, having worked in both Republican and Democratic presidential administrations. In her most recent role, at the USTR in the Executive Office of the President, she negotiated policy regarding issues before the WTO. She also led the operation of committees on technical barriers to trade, industrial subsidies, trade facilitation and more.
• Her negotiations credentials include free trade agreements in the Western Hemisphere and the trade-related portions of United Nations’ multilateral environment and public health agreements.

A teacher and an entrepreneur: An adjunct professor for 17 years, Durkin taught international trade and investment policy at Georgetown University’s Master of Science in Foreign Service program.

• She is also the founder of Sparkplug, LLC, a consulting firm that specialized in advising corporate affairs teams and think tank leaders on organizational strategy.

The House should move quickly to pass the Miscellaneous Tariff Bill Reform Act, legislation on which the NAM has led advocacy efforts.

What’s going on: On Tuesday, House Ways and Means Trade Subcommittee Chairman Adrian Smith (R-NE) introduced the Miscellaneous Tariff Bill Reform Act, which seeks to renew the MTB—a manufacturing-critical law that temporarily removes or reduces tariffs on products not available in the U.S.—as soon as possible.

• The NAM, which has long urged Congress to take up the issue, lauded the legislation and called for its swift passage.
• “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,” said NAM Managing Vice President of Policy Chris Netram in a statement cited by Chairman Smith’s office. “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.”
• The last MTB expired in December 2020.

Why it’s important: In the three-and-a-half years that they have been operating without an MTB, manufacturers and other businesses in the U.S. have paid more than $1.3 million a day to get inputs they cannot find in the U.S., according to an NAM analysis.

• Passing the MTB through 2026, on the other hand, and reauthorizing passage of future MTB cycles will boost U.S. competitiveness.
• Tariff relief under the previous MTB increased U.S. gross domestic product by up to $3.3 billion every year, according to the U.S. International Trade Commission.

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.