Transportation and Infrastructure

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.

It’s been more than two years since the Miscellaneous Tariff Bill expired—and the lack of renewal is harming manufacturers in the U.S.

What’s going on: Manufacturers have been operating without an MTB—legislation that temporarily eliminates or reduces tariffs on products not available in the U.S.—since January 2021, when MTB legislation that had been passed in 2018 expired.

• The MTB is typically renewed every few years. In June 2021, the Senate passed an MTB measure as part of the U.S. Innovation and Competition Act, and the House passed a different version in the America COMPETES Act, but Congress did not agree to trade provisions in the final China competition legislation.
• No MTB legislation has been introduced during this Congress in either chamber.

Why it’s important: The result of this inaction has been a direct economic hit to manufacturers, particularly small and medium-sized manufacturers that are paying more for product inputs.

• Since the MTB expired in December 2020, manufacturers and other businesses have paid more than $1 billion—or $1.3 million per day—in anticompetitive tariffs for goods they cannot source in the U.S., according to an NAM analysis.
• The added costs can create higher prices for consumers, making it harder for American families to buy goods from manufacturers in the U.S.
• Due in part to these tariffs, some manufacturers are having difficulty maintaining current staffing levels and expanding opportunities for existing workers.

Hurting the heartland—and Ukraine: Sukup Manufacturing Co., headquartered in Sheffield, Iowa, is a family-owned and -operated manufacturer of grain-storage and grain-handling products. It is paying tens of thousands of dollars in tariffs to import components from the Kyiv province of Ukraine.

• In 2022, the company paid nearly $40,000 in tariffs on imports from Ukraine.
• Ukraine’s export market is essential to its economic development as well as its ability to withstand Russia’s invasion. The lack of an MTB is creating barriers between companies in the U.S. and their Ukrainian partners at exactly the wrong time.

Hurting a local economy: For Element Electronics, the last remaining U.S. producer of LCD TVs, the absence of an MTB has created a highly uneven playing field—which has led to layoffs of employees at the Winnsboro, South Carolina, facility.

• Mexican producers of LCD TVs buy the same LCD panels as Element but are allowed to import them duty-free. They are then able to export the finished TVs to the U.S. duty-free, too, putting Element at an unfair disadvantage.
• Restoring the MTB would allow the company to compete fairly and return to full production and employment.

Creating jobs overseas instead of in the U.S.: Glen Raven, a 143-year-old global fabric manufacturer based in Burlington, North Carolina, uses the MTB for duty-free access to raw materials that haven’t been made in the U.S. in decades. When the previous MTB expired, the company was compelled to invest in operations outside of the U.S.

• During the pandemic, the business created more than 200 jobs, but because of the tariffs, it could not afford to locate the positions in the U.S. and instead expanded operations in Europe and elsewhere.
• “While we are committed to job creation and investment in the U.S., if we are unable to be competitive in this environment, we have a responsibility to invest where we have the greatest opportunity to achieve our growth objectives,” said Glen Raven President and CEO Leib Oehmig.

Losing customers: The family-owned Nation Ford Chemical, another South Carolina manufacturer, makes products used every day by the U.S. military. The absence of an MTB has cost the small company customers and is jeopardizing some of its 80 jobs.

• In 2022, to make just one of its products—a jet-engine lubricant additive called PANA—the Fort Mill–based company spent almost $500,000 on duties alone.
• Tariffs have cost NFC so dearly that it may soon be forced to close the smoke-dye component of its business. If it does, the company would have to lay off up to 10 workers, and the U.S. military would have to source the product from foreign markets.

Costing taxpayers: ICF Mercantile, a manufacturer based in New Jersey, purchases raw materials that are not available in the U.S. for products it sells to NASA and the Defense Department.

• The company is forced to pass the cost of the 10% tariff on to its government customers, which ultimately increases costs for American taxpayers.

What we’re doing: The NAM continues to lead the business community in urging Congress to pass the MTB.

• “If Congress is serious about supporting manufacturers and workers in the United States, they must prioritize the passage of the MTB as soon as possible this year,” said NAM Director of Trade Facilitation Policy Ali Aafedt.

It’s been more than two years since the Miscellaneous Tariff Bill expired—and the lack of renewal is harming manufacturers in the U.S.

What’s going on: Manufacturers have been operating without an MTB—legislation that temporarily eliminates or reduces tariffs on products not available in the U.S.—since January 2021, when MTB legislation that had been passed in 2018 expired.

• The MTB is renewed typically every few years. In June 2021, the Senate passed an MTB measure as part of the U.S. Innovation and Competition Act, and the House passed a different version in the America COMPETES Act,  but Congress did not agree to trade provisions in the final China competition legislation.
• No MTB legislation has been introduced during this Congress in either chamber.

Why it’s important: The result of this inaction has been a direct economic hit to manufacturers, particularly small and medium-sized manufacturers that are paying more for product inputs.

• Since the MTB expired in December 2020, manufacturers and other businesses have paid more than $1 billion—or $1.3 million per day—in anticompetitive tariffs for goods they cannot source in the U.S., according to an NAM analysis
• The added costs can create higher prices for consumers, making it harder for American families to buy goods from manufacturers in the U.S.
• Due in part to these tariffs, some manufacturers are having difficulty maintaining current staffing levels and expanding opportunities for existing workers.

Hurting the heartland—and Ukraine: Sukup Manufacturing Co., headquartered in Sheffield, Iowa, is a family-owned and -operated manufacturer of grain-storage and grain-handling products. It is paying tens of thousands of dollars in tariffs to import components from the Kyiv province of Ukraine.

• In 2022, the company paid nearly $40,000 in tariffs on imports from Ukraine.
• Ukraine’s export market is essential to its economic development as well as its ability to withstand Russia’s invasion. The lack of an MTB is creating barriers between companies in the U.S. and their Ukrainian partners at exactly the wrong time.

Read the full story here.

A power line and wind farm project first conceived in 2006 finally received a critical permit this month—a perfect example of why we need permitting reform, according to The Wall Street Journal (subscription).

What’s going on: “The Interior Department’s Bureau of Land Management gave the green light [last] Thursday for a high-voltage power line [in the SunZia project]. The permit allows the developer, Pattern Energy, to build the country’s largest wind energy project across three counties in rural New Mexico and deliver that electricity to large markets in Arizona and California.”

• Developers applied for federal approval in 2008, and the Obama administration “fast-tracked” the project four years later.
• Pattern Energy plans to start construction later this year.

Why it’s important: SunZia is emblematic of a flawed system, one which President Biden and legislators are now trying to fix, according to the Journal.

• “The labyrinthine state, local and federal permitting processes are often drawn out for years, require duplicative paperwork and generate thousands of pages of government analysis. The average federal environmental review, for example, takes 4½ years, according to a 2020 White House report.”
• Earlier this month, the White House recommended changes it said would help speed the approval of transmission projects.

What they’re saying: “‘The White House doesn’t have a prayer of implementing the infrastructure bill or the [Inflation Reduction Act] without permitting reform,’ said Rep. Garret Graves (R., La.), a lead Republican negotiator in the debt-ceiling talks. ‘And anyone who’s actually out there trying to build things will tell you that.’”

What we’re doing: The NAM has been one of the foremost voices urging permitting reform on Capitol Hill.

• NAM President and CEO Jay Timmons recently testified before Congress on the topic and outlined manufacturing priorities for overhauling the permitting process.
• At another recent congressional hearing, NAM Vice President of Energy and Resources Policy Brandon Farris told legislators, “Streamlining and modernizing our nation’s permitting laws and procedures will help us advance many of our nation’s shared priorities, improving the quality of life for all communities; modernizing our infrastructure; achieving energy security; ramping up critical mineral production; enhancing manufacturing competitiveness; and creating manufacturing jobs in the U.S.”

The NAM is a meeting place like no other, where manufacturers of all sizes and sectors gather to make the industry stronger. Recently, along with its partner CONNEX Marketplace, it invited manufacturing leaders to D.C. for high-level discussions about supply chain challenges.

The big picture: This meeting came at an exciting time for CONNEX. Formerly known as Manufacturers Marketplace, the program pivoted in 2022 to combine state-specific installations with the national platform and become a more powerful SaaS.

• Connecticut launched its own version of the CONNEX platform back in February, thanks to the support of the CBIA (a state business association and NAM partner) and the state’s chief manufacturing officer, Paul Lavoie—who discussed some early success stories at the D.C. event.
• “In the first two weeks, more than 200 companies joined, significantly more than the state’s most optimistic projections,” according to a Hartford Business Journal piece—and Lavoie told the paper he expects signups to blow past 750 in the first year.
• Meanwhile, Kentucky is also getting in on the action. The Kentucky Association of Manufacturers (also an NAM state partner) recently launched its own CONNEX Marketplace installation, which was announced by the governor. KAM CEO Frank Jemley also came to D.C. for the meeting, bringing his own success stories.

Talking the talk: The leaders in D.C. focused on how manufacturers can improve security and resiliency in the supply chain. They also discussed how local and state governments can ease supply chain challenges for businesses.

Security: As the participants observed, the key challenge is “illuminating risk” inside the supply chain, so that companies know what they’re facing.

• They discussed the many types of risks involved in supply chains, including cybersecurity, financial, business continuity, capacity and more.
• What’s next: CONNEX is working to integrate technology that will identify and highlight potential risks in a company’s specific supply chain.

Cooperation: The supply chain functions (or doesn’t) on the strength of manufacturers’ cooperation, from the largest companies to their smallest suppliers.

• Furthermore, competition is not company vs. company, but supply chain vs. supply chain, the participants agreed.
• Small manufacturers might benefit from a coach or guide to walk through the sourcing process so they understand how to remain resilient and competitive, one attendee recommended.
• What’s next: CONNEX is working on a playbook that entities such as manufacturing extension partnerships can use to help coach SMMs through the procurement process.

Progress: Executives from CONNEX reported more than 4,000 suppliers were connected to buyers in 2022, while the platform hosted 396 separate “postings” from manufacturers looking for specific parts or supplies.

The NAM will host another forum this fall where manufacturers will tackle supply chain issues. Contact NAM Senior Director of Member Business Services Anna Chongpinitchai for details. 

The NAM is a meeting place like no other, where manufacturers of all sizes and sectors gather to make the industry stronger. Recently, along with its partner CONNEX Marketplace, it invited manufacturing leaders to D.C. for high-level discussions about supply chain challenges.

The big picture: This meeting came at an exciting time for CONNEX. Formerly known as Manufacturers Marketplace, the program pivoted in 2022 to combine state-specific installations with the national platform and become a more powerful SaaS.

• Connecticut launched its own version of the CONNEX platform back in February, thanks to the support of the CBIA (a state business association and NAM partner) and the state’s chief manufacturing officer, Paul Lavoie—who discussed some early success stories at the D.C. event.
• “In the first two weeks, more than 200 companies joined, significantly more than the state’s most optimistic projections,” according to a Hartford Business Journal piece—and Lavoie told the paper he expects signups to blow past 750 in the first year.
• Meanwhile, Kentucky is also getting in on the action. The Kentucky Association of Manufacturers (also an NAM state partner) recently launched its own CONNEX Marketplace installation, which was announced by the governor. KAM CEO Frank Jemley also came to D.C. for the meeting, bringing his own success stories.

Talking the talk: The leaders in D.C. focused on how manufacturers can improve security and resiliency in the supply chain. They also discussed how local and state governments can ease supply chain challenges for businesses.

Security: As the participants observed, the key challenge is “illuminating risk” inside the supply chain, so that companies know what they’re facing.

• They discussed the many types of risks involved in supply chains, including cybersecurity, financial, business continuity, capacity and more.
• What’s next: CONNEX is working to integrate technology that will identify and highlight potential risks in a company’s specific supply chain.

Cooperation: The supply chain functions (or doesn’t) on the strength of manufacturers’ cooperation, from the largest companies to their smallest suppliers.

• Furthermore, competition is not company vs. company, but supply chain vs. supply chain, the participants agreed.
• Small manufacturers might benefit from a coach or guide to walk through the sourcing process so they understand how to remain resilient and competitive, one attendee recommended.
• What’s next: CONNEX is working on a playbook that entities such as manufacturing extension partnerships can use to help coach SMMs through the procurement process.

Progress: Executives from CONNEX reported more than 4,000 suppliers were connected to buyers in 2022, while the platform hosted 396 separate “postings” from manufacturers looking for specific parts or supplies.

The NAM will host another forum this fall where manufacturers will tackle supply chain issues. Contact NAM Senior Director of Member Business Services Anna Chongpinitchai for details. 

Energy Secretary Jennifer Granholm supports the Mountain Valley Pipeline, a natural gas project in Appalachia that would provide clean energy “where there’s huge demand for power”—and she defended her position at POLITICO’s energy summit in Washington last week, according to POLITICO (subscription).

What’s going on: “Granholm endorsed the pipeline in a recent letter to the Federal Energy Regulatory Commission,” POLITICO reports.

• At the event, she followed it up by saying, “We know that there is a real desire to have energy security in areas where there’s huge demand for power. We also know that we have got to accelerate investment in clean [energy].”

Why it’s important: Granholm’s support for the pipeline and her comments—which were disrupted by protestors who ran toward the stage shouting their opposition—“underscore the Biden administration’s balancing act in meeting its goals of ending carbon pollution from fossil fuels while acknowledging the continued role of the oil and gas industry in the economy.”

Helping allies: The U.S. has large supplies of natural gas, Granholm told the audience, and it “is going to be ‘a friend’ to its allies,” many of whom have moved away from Russian gas in response to that country’s invasion of Ukraine last year.

The last word: “The NAM supports an all-of-the-above energy approach, including traditional fuels, such as U.S. natural gas,” said NAM Vice President of Energy and Resources Policy Brandon Farris.

• “The proposed Mountain Valley Pipeline is a critical part of our energy future as natural-gas production strengthens energy access for manufacturers while generating billions of dollars in new investments, benefiting local communities and creating well-paying jobs.”
• “The NAM recently hosted Department of Energy Assistant Secretary of Fossil Energy and Carbon Management Brad Crabtree for a NAM-member briefing on manufacturer priorities and followed up by reaffirming the NAM’s support of U.S. natural gas production and exports.”

G7 leaders are focusing on “de-risking,” but not “decoupling” from China, they said in a joint statement covered by CNBC.

The details: “We are not decoupling or turning inwards,” the statement said. However, “we recognize that economic resilience requires de-risking and diversifying.”

• “We will seek to address the challenges posed by China’s non-market policies and practices, which distort the global economy,” the leaders continued. “We will counter malign practices, such as illegitimate technology transfer or data disclosure.”

Biden concurs: President Biden echoed these sentiments at a press conference on Sunday, emphasizing the need to “diversify” supply chains so that no one country has a monopoly on any essential product.

• “It means resisting economic coercion together and countering harmful practices that hurt our workers,” he continued. “It means protecting a narrow set of advanced technologies critical for our national security.”

In sum: “We stand prepared to build constructive and stable relations with China, recognizing the importance of engaging candidly with and expressing our concerns directly to China. We act in our national interest,” the G7 statement said.

NAM in action: As exemplified by its recent Competing to Win Tour in Europe, the NAM is working to bring business and government leaders together to strengthen the resilience of manufacturers in the United States and our democratic allies in the face of greater uncertainty with respect to China.

The last word: “Manufacturers have consistently called for a rethink of the U.S.–China relationship to boost competitiveness globally,” says NAM Vice President of International Economic Affairs Ken Monahan.

• “The strategy requires collaborating with allies for supply chain resilience, addressing discriminatory Chinese policies and creating trade openings through robust agreements. Yesterday’s announcement highlights the path ahead.”

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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Convention halls are filling back up again following the pandemic, restoring a critical type of “economic fuel” that had been cut off for three years, The Wall Street Journal (subscription) reports.

What’s going on: Attendance at in-person business conferences is on the rise across the U.S., supporting local jobs and wages that had suffered since 2020—particularly in tourist- and conference-heavy cities such as Las Vegas.

• “Economists said that travelers provide an economic and tax boost to cities without using services, like schools. ‘They come, spend and leave,’ said Angelos Angelou, president of an economic-impact research firm that has produced reports for events and conferences like South by Southwest and Lollapalooza. ‘It’s the kind of economic bonanza that any type of city would love to have.’”

​​​​​​​Betting big: Some municipalities are so sure the recovery is permanent that they’ve invested in new conference facilities.

• Seattle recently opened a $2 billion addition to its convention center, and last November, Dallas voters approved their own convention-center expansion—with a price tag of $4 billion—to be funded through hotel taxes.