Rio Tinto Seeks to Meet Growing Copper Appetite
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.
Energy Tax Credits to Be Expanded
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.
PA Manufacturer: Preserve “Keystone” Tax Provisions
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.”
NAM Gets New International Policy Lead
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.
NAM Urges Passage of New MTB Bill
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.
NAM: Manufacturers Need a Better Section 301 Exclusion Process
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.
NAM, Allies: Allow Cross-Border Trade
Manufacturers and other businesses on both sides of the U.S.–Mexico border are feeling the pinch from sudden, intermittent port closures and other government measures being taken to mitigate the ongoing migrant crisis, the NAM and two allied groups told President Biden and Mexican President Andrés Manuel López Obrador this week.
What’s going on: Last December, U.S. Customs and Border Protection temporarily shuttered critical rail ports, including San Diego, California, and El Paso and Eagle Pass, Texas, in an effort to stem migration surges, idling nearly 10,000 rail cars on both sides of the border.
- Last month, the Texas Department of Public Safety renewed safety inspections of vehicles between Texas and Mexico, adding hours to cargo trucks’ border wait times (Freight Waves).
Why it’s important: Port closures and increased vehicle inspections “have significantly increased congestion around ports of entry, caused delays to cross-border trade and harmed productive businesses across industries and their employees,” said NAM President and CEO Jay Timmons, Texas Association of Business President and CEO Glenn Hamer and CONCAMIN President Alejandro Malagón.
- The stoppages “risk making critical supply chains between the United States and Mexico less resilient and dependable.”
What should be done: The U.S. and Mexican governments must commit to creating and abiding by predictable, transparent processes for cross-border trade, the groups urged.
- In addition to stopping the port closures for commercial freight and trucking, “our two countries should strive to enhance trading ties as the importance of nearshoring and friendshoring accelerates. Doing so will make our manufacturing, energy and agricultural sectors more competitive globally.”
Restoring MTB Will Strengthen Manufacturing
For More Than Three Years, Manufacturers Have Been Paying Millions of Dollars in Higher Prices for Critical Inputs
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.
A Key Trading Partner: The NAM Hosts Make UK, Parliament Members
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.”
FAA Authorization Moves Forward
In a bipartisan vote Wednesday, the Senate moved to advance Federal Aviation Administration reauthorization—but lawmakers still face a looming deadline to pass the legislation (The Hill).
What’s going on: “Senators voted 89 to 10 to overcome the first procedural hurdle and move toward consideration of the package ahead of the May 10 deadline.”
- The draft 1,069-page bill—which already has been punted three times—sets the agency’s priorities. It would authorize billions of dollars in appropriations for the FAA, as well as hundreds of millions of dollars for the National Transportation Safety Board, from fiscal year 2024 through 2028.
- But all 100 senators must agree to fast-track the measure for it to pass before next Friday.
Why it’s important: The FAA reauthorization bill renews statutes governing the agency’s civil aviation programs, as well as revenue collection authority. From air traffic operations to airport development, these functions are critical to the U.S. economy and the ability of Americans to travel.
However . . . Both Democrats and Republicans want amendment votes on the measure, and “lawmakers acknowledge it could be a bumpy ride” to passage.
A hot-button issue: One sticky wicket amendment that’s likely to get a vote would remove language in the bill that adds 10 flights at Ronald Reagan Washington National Airport.
- Senators from the Washington, D.C., area say the airport cannot handle any more traffic. Virginia and Maryland are home to Dulles International Airport and Baltimore Washington International Airport, respectively.