Policy and Legal

The regulatory onslaught facing manufacturers has “reached a fever pitch” over the past four years, but the incoming administration can turn things around, the NAM and more than 100 other manufacturing associations told President-elect Trump and his Cabinet today.

What’s going on: “You have the opportunity to tackle this challenge by addressing burdensome regulations that are stifling investment, making us less competitive in the world, limiting innovation and threatening the very jobs we are all working to create right here in America,” the groups wrote to the president-elect.

What they said: The letter outlines a pro-manufacturing regulatory agenda based on more than three dozen regulatory actions the administration can take starting on Day One. Key highlights include the following:

• Instituting a “regulatory reset”: The NAM and its partners are calling on the incoming administration to “stop the trend of overreaching regulations that seek to expand agencies’ authority” and instead focus on tailored rulemakings based on robust collaboration with the industry.
• Lifting the LNG export ban: President-elect Trump should undo the Biden administration’s January moratorium on liquefied natural gas export permits. A protracted pause would jeopardize 900,000 jobs and $250 billion in U.S. gross domestic product, according to a recent NAM study.
• Easing the permitting burden: “The United States’ out-of-date permitting laws and procedures are holding back progress and restricting manufacturers’ ability to compete globally,” says the letter. The Trump administration should accelerate the permitting process for critical energy infrastructure, create enforceable deadlines and provide regulatory certainty to manufacturers.
• Reconsidering NAAQS PM2.5 and maintaining the existing NAAQS ozone standard: In February, the Environmental Protection Agency announced an unworkably stringent National Ambient Air Quality Standard for fine particulate matter (PM2.5). The Trump administration should relax the PM2.5 rule and maintain the existing NAAQS for ozone—a standard the European Union has set more than 70% above the current U.S. threshold—when it comes up for review in 2025.
• Replacing unbalanced power plant rules: The Trump administration should replace the EPA’s new rules for existing coal-fired and new natural gas–fired power plants with workable standards.
• Depoliticizing the proxy process: In recent years, the Securities and Exchange Commission has taken steps to empower activist investors and proxy advisory firms. The incoming administration should rescind damaging standards, such as Staff Legal Bulletin 14L, which requires companies to include activist proposals on their proxy ballots, while preserving and protecting much-needed reforms from the first Trump administration, including the landmark 2020 proxy firm rule.

Other asks: The group also urged the new administration to:

• Reverse the trend of overly burdensome and unworkable chemicals regulations, such as the Biden administration’s PFAS rules;
• Take decisive measures to protect manufacturers’ intellectual property rights;
• Narrow the scope of proposed cyber incident reporting requirements; and
• Reconsider the Occupational Safety and Health Administration’s damaging “walkaround” rule and more.

Ready to move forward: America’s manufacturers are committed to a regulatory environment that “truly supports manufacturing, innovation and American prosperity”—and they are “ready to move forward” with the president-elect to “make America’s manufacturing sector unstoppable.” 

Pharmacy benefit managers are driving up health care costs for employers and employees alike—and they must be reformed as soon as possible, Rep. Buddy Carter (R-GA), Sen. James Lankford (R-OK) and other members of Congress said at a bicameral, bipartisan Capitol Hill press conference Wednesday.

What’s going on: Rep. Carter, Sen. Lankford and other lawmakers—including Reps. Mariannette Miller-Meeks (R-IA), Raja Krishnamoorthi (D-IL) and Nanette Barragan (D-CA)—are calling on House and Senate leadership to advance PBM reform legislation in Congress’ year-end lame-duck session.

• The House passed a bipartisan PBM reform bill last December, and seven congressional committees—in both the House and Senate—have approved PBM bills during this Congress.
• The NAM, long a champion of commonsense PBM reform, offered manufacturers’ strong support for the lawmakers’ efforts.

What they said: “Democrats and Republicans [alike] … recognize that PBMs are decreasing the accessibility, the affordability and therefore the quality of health care in America,” said Rep. Carter, who showed the crowd photos of real patients facing difficulties accessing medications due to PBMs.

• “Congress must act before the end of the year to save our constituents’ lives. That’s why I’m leading a bipartisan letter to the House and Senate leadership urging them to prioritize PBM reform during end-of-year negotiations and ensure that the bipartisan efforts we have worked on through the 118th Congress are enacted into law.”
• Added Rep. Miller-Meeks, sponsor of the NAM-backed DRUG Act: “Every American who utilizes prescription medications experiences the impact that PBMs … have on our health care system. Patients everywhere—and our independent pharmacists—deserve a health care system where patients always come first.”

Why it’s important: PBMs often dictate the prices that patients pay at the pharmacy counter—and their business model incentivizes them to increase those prices for their own benefit.

• PBMs take a cut of a drug’s list price and pocket a large portion of rebate savings that are supposed to go back to patients and employers.
• In addition, they operate without transparency into their pricing decisions, making it more difficult for employers to reduce prices or access savings.

Now’s the time: “We want leadership to be able to take [PBM reform legislation] up in the end-of-the-year package,” Sen. Lankford said at the press conference. “We don’t want to tell … patients, ‘Wait another two years and maybe we’ll get into it in the next session.’ Let’s actually get into it in this session.”  

NAM advocacy: The NAM has been at the forefront of the fight for PBM reform. Last month, it launched a seven-figure ad campaign urging the passage of reforms during the lame-duck session.    

The last word: “Manufacturers and manufacturing workers are facing increasing and unsustainable health care costs as a direct result of PBMs,” said NAM Managing Vice President of Policy Chris Netram. “Manufacturers agree with Rep. Carter and the bipartisan, bicameral members of Congress calling for reform: Congress must act urgently—in the lame-duck session—to increase transparency, lower health care costs and protect manufacturing workers.”

Washington, D.C. – Today, the National Association of Manufacturers, along with more than 100 manufacturing associations, sent a letter to President Donald Trump laying out a roadmap for regulatory actions across a wide range of agencies that would boost the manufacturing economy and put a stop to the regulatory onslaught that is costing manufacturers $350 billion each year.

Manufacturers have made the case that unbalanced, unworkable regulations severely impact our ability to grow and create jobs. Today’s letter lays out specific steps the new administration can take to reverse the trend of federal agency overreach—providing much-needed regulatory certainty to manufacturers and empowering the industry to continue to make the long-term investments that drive job creation, growth and economic competitiveness here in the United States.

The letter states, in part:

Dear President-elect Trump,

Right now, regulations are strangling our economy. Manufacturers are shouldering enormous regulatory compliance costs—nearly $350 billion annually, or 12% of our entire sector’s contribution to U.S. GDP. For smaller manufacturers with fewer than 50 employees, these costs can exceed $50,000 per employee each year. This means that a small manufacturer with just 20 employees pays $1 million per year to comply with federal regulations—rather than investing those funds in raises or new jobs.

The regulatory onslaught reached a fever pitch during the Biden administration. Prior to the election, the National Association of Manufacturers surveyed the industry and found a significant decline in optimism among manufacturers, with an unfavorable business climate, particularly taxes and regulations, cited as a primary business challenge by more than 60% of respondents.

You have the opportunity to tackle this challenge by addressing burdensome regulations that are stifling investment, making us less competitive in the world, limiting innovation and threatening the very jobs we are all working to create right here in America.

The letter highlights more than three dozen regulatory actions the Trump administration can take to support manufacturing growth, including the following:

• Liquefied Natural Gas Export Ban: On Day One of your administration, lift the pause on LNG exports through an updated national interest assessment.
• Permitting Reform: Appoint an official within your administration to help coordinate policies across the executive branch to ease the permitting burden. Specifically, your administration should start by prioritizing a reconsideration of the “NEPA Phase 2 Rule” and the current implementation of the permitting reform provisions of the Fiscal Responsibility Act.
• National Ambient Air Quality Standards for Particulate Matter and Ozone: Reconsider and relax the Biden administration’s NAAQS for PM2.5 rule and maintain both the primary and secondary standard for the NAAQS for ozone rule at 70 parts per billion.
• Power Plant Rules: Replace the Environmental Protection Agency’s rule for existing coal-fired and new natural gas–fired power plants with workable standards.
• Proxy Advisory Firms and the Proxy Process: Rescind Staff Legal Bulletin 14L and end the politicization of the proxy process. Additionally, enforce and preserve the 2020 proxy advisory firm rule while taking steps to build on its reforms with additional policies modeled on the Securities and Exchange Commission’s 2019 proposal.

To view the full letter and list of regulations, click here.

Background:

In 2023, the NAM, along with members of the NAM’s Council of Manufacturing Associations and Conference of State Manufacturers Associations, launched the Manufacturers for Sensible Regulations coalition to address the impact of the regulatory onslaught coming from federal agencies.

An NAM-commissioned analysis on the cost of federal regulations to the U.S. economy shows the following:

• The total cost of federal regulations exceeds $3 trillion each year, an amount equal to 11% of U.S. GDP.
• Federal regulations cost the manufacturing sector about $350 billion per year.
• Small manufacturers with fewer than 50 employees face disproportionate regulatory burdens, incurring costs of more than $50,000 per employee per year to comply with federal regulations.
• Since 2012, there has been a $465 billion increase in aggregate regulatory compliance costs.

-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 $2.91 trillion to the U.S. economy annually and accounts for 53% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org.

Washington, D.C. – Today, the National Association of Manufacturers voiced manufacturers’ support for efforts led by Rep. Buddy Carter (R-GA) to bring much-needed reform and transparency to pharmacy benefit managers. The NAM is a champion for PBM reform given that these underregulated middlemen drive up health care costs for manufacturers and manufacturing workers.

Following a press conference hosted by Rep. Carter to announce a bipartisan effort with dozens of members of Congress to push for PBM reform in the lame-duck session of Congress, NAM Managing Vice President of Policy Chris Netram released the following statement:

“Manufacturers and manufacturing workers are facing increasing and unsustainable health care costs as a direct result of PBMs. Manufacturers agree with Rep. Carter and the bipartisan, bicameral members of Congress calling for reform: Congress must act urgently—in the lame-duck session—to increase transparency, lower health care costs and protect manufacturing workers.”

Background: Last month, the NAM launched a seven-figure video and digital advertising campaign urging Congress to pass PBM reform legislation this year.

The NAM’s Q3 2024 Manufacturers’ Outlook Survey found that 78% of small manufacturers with fewer than 50 employees cite rising health care costs as a primary business challenge—the top concern among small business respondents in the survey.

To view the NAM’s latest digital ad, click here.

-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 $2.91 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 U.S. Court of Appeals for the D.C. Circuit should overturn a lower court’s ruling that the Securities and Exchange Commission lacks the authority to regulate proxy advisory firms, the NAM said in a recently filed brief.

What’s going on: The Nov. 15 brief asking the appeals court to overturn a February ruling by the D.C. District Court is the latest in a years-long campaign by the NAM to ensure reasonable regulation of proxy firms. These powerful, unregulated entities often dictate how shareholders vote on proxy ballot proposals that come before public companies.

• “Since the passage of the Securities Exchange Act of 1934 in the wake of the Great Depression, the Securities and Exchange Commission has regulated proxy solicitation, so shareholders can confidently vote based on transparent and reliable information,” according to the NAM brief. “Accordingly, since the proxy voting advice industry emerged four decades ago, those firms have been subject to SEC regulation.”
• Institutional Shareholder Services, the largest and most influential proxy firm, “would rather not be regulated at all”—but “[t]he record overwhelmingly establishes that proxy firms ‘solicit’ proxies under any reasonable definition,” subjecting them to SEC oversight as required by the Exchange Act.

Why it’s important: Proxy firms wield enormous influence over both manufacturers and Main Street investors, the NAM said.

• “ISS and its main competitor, Glass Lewis, control 97% of the proxy advice market and together influence nearly 40% of the U.S. shareholder vote,” the NAM told the court in its brief.
• Further, proxy firms operate with undisclosed conflicts of interest, their reports can contain errors and misleading statements and their “robo-voting” services give them the authority to cast investors’ proxy votes with no review or input by the investors themselves.

NAM on the front lines: In July 2020, after years of NAM advocacy, the SEC finalized a rule instituting critical proxy firm reforms. ISS quickly brought a legal challenge, and the NAM intervened in the case to ensure a robust defense of the rule.

• Following the change in presidential administrations in 2021, in separate lawsuits the NAM successfully challenged the Biden SEC’s refusal to enforce the 2020 rule and its rescission of critical portions of the rule.
• After an unfavorable decision from the D.C. district court in the ISS challenge, the Biden SEC declined to pursue an appeal, effectively disclaiming its authority to regulate proxy firms. The NAM took the lead as intervenor-appellant in the case, so manufacturers are now the sole bulwark against proxy firms’ unchecked power. A victory in the D.C. Circuit for the NAM would make the proxy firms subject to the 2020 rule’s important reforms.

Former SEC officials agree: A group of former SEC commissioners and staff authored an amicus brief in support of the NAM’s position.

• The brief chronicles the commission’s 50-year history of affirming that proxy firms are engaged in solicitation. The officials make clear that “stripping the SEC of its long-standing and Congressionally conferred power to regulate the firms” would “seriously harm the investing public by decreasing fairness and honesty in the markets—exactly the opposite of what Congress was trying to accomplish in the Exchange Act.”

What’s next: ISS’s response to the NAM’s brief is due in the coming weeks, and the court likely will schedule oral argument for early 2025.

Washington, D.C. – National Association of Manufacturers President and CEO Jay Timmons issued the following statement on the nomination of Scott Bessent to be the next Treasury Secretary:

“President Trump’s 2017 tax reforms were rocket fuel for manufacturing, and their transformative impact cannot be overstated. They put into place competitive policies that fueled record job creation, wage growth, capital investment and innovation.

“With the nomination of Scott Bessent as Secretary of the Treasury, we have an opportunity to build on this momentum. President Trump recently pledged at the NAM’s fall board meeting that he will make these tax cuts permanent, and Scott will play a vital role in achieving that goal.

“Scott’s deep expertise in financial markets and his dedication to fostering economic growth make him an outstanding choice to lead the Treasury Department. Manufacturers are ready to work with him to ensure that manufacturing can continue to drive the economy forward.”

-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 $2.91 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.

Manufacturers have one last opportunity to express their opinions to the new administration and Congress before they take office: the NAM’s Q4 2024 Manufacturers’ Outlook Survey, which is open until Dec. 4.

“The Outlook Survey is the NAM’s principal means of finding out what manufacturers are experiencing and thinking, and one of the industry’s most potent advocacy tools,” the NAM’s new chief economist, Victoria Bloom, said. Bloom walked us through the survey’s impressive history of influencing policy debates and its particular importance today. 

What it is: The NAM has run its Outlook Survey every quarter for more than 25 years, capturing manufacturers’ opinions on enormous policy shifts and seismic changes in the economy, including the 2017 tax reform and the COVID-19 shutdowns, Bloom said.

• All manufacturers in the NAM’s membership are eligible to take it, making it an unparalleled sampling of industry opinion. Respondents include companies of all sizes and sectors, located across the entire United States.
• The survey is in the field for about two and a half weeks and takes only minutes to complete—you can even do it on your phone. 

Why it matters: Not only will the current survey be the last word from manufacturers before the White House and Congress change hands, but it will help provide clarity on where manufacturers stand in this period of economic uncertainty. It’s crucial for manufacturers to speak up about what they are seeing, Bloom emphasized.

• “We’ve had a lot of muddied economic data lately due to worker strikes and hurricanes, as reflected in the monthly jobs report and industrial production report,” she said. “This has made it more difficult to determine how the industry is actually doing, which is why we need manufacturers to tell us directly.”

Who’s the audience: The NAM’s survey is read—and publicized—by the highest levels of the administration and Congress. To take one example, it had a profound impact during the years following tax reform:

• President Trump cited the Outlook Survey in a 2019 address at the Lima Army Tank Plant, noting manufacturers’ record levels of optimism following the passage of the Tax Cuts and Jobs Act.
• John Thune (R-SD), the incoming Senate majority leader, cited the survey in a 2018 press release, also on the benefits of tax reform.
• Then-Senate Majority Leader Mitch McConnell (R-KY) cited the survey on the Senate floor in 2018.

What’s in it: The survey asks a few standard questions, including the big one: are manufacturers feeling positive or negative about their company’s outlook?

• The survey also asks manufacturers about the biggest challenges they’re facing. In the Q3 2024 survey, the top concerns included a weaker domestic economy, followed by rising health care costs.
• These standard questions are often followed by questions that pertain to specific policy developments, like the looming expiration of critical tax provisions in 2025, or manufacturers’ responses to the COVID-19 pandemic.

The data: The survey’s questions often reveal facts about manufacturers that appear nowhere else.

• For example, Bloom told us, in Q3 2024, respondents as a whole felt most concerned by the weakening state of the economy. However, small and medium-sized manufacturers, when separated out, cited rising health care costs as their top concern.
• “The survey told us rising health care costs have been a more significant challenge for SMMs, which is an important data point for the NAM’s advocacy work,” Bloom said.
• During the early months of the COVID-19 pandemic, the survey was a particularly valuable tool, she added. Amid the chaos of the lockdowns, the NAM was able to survey its members to determine what share of manufacturers were continuing operations in whole, in part or not at all.

The bottom line: “As we will soon have a new administration and a new Congress, manufacturers must speak up—and keep speaking up—about their challenges and concerns,” Bloom concluded.

• “Future Outlook Surveys will cover new developments as they arise, and of course manufacturers will be faced with new challenges and policy threats. If they haven’t already, NAM members should make survey-taking a habit, for the health of our industry.”

The North American trade landscape will look different once President-elect Trump takes office, NAM President and CEO Jay Timmons said this week—but “the special relationship” between the U.S. and Canada will only grow stronger.

What’s going on: “President Trump has been very clear about his priorities, his commitments,” Timmons said Wednesday in Ottawa on CBC News’ “Power & Politics,” where he was joined by Canadian Manufacturers & Exporters President and CEO Dennis Darby. Timmons was in Canada for this year’s North American Manufacturing Conference, hosted primarily by the CME.

• “[E]veryone in the business community and in adjoining governments need to be approaching the administration change with very clear eyes [because] … what Donald Trump says, Donald Trump means. Now, having said that, Donald Trump wants to see manufacturing in the United States grow and thrive.”
• Part of that prosperity will be continuing and strengthening United States–Mexico–Canada Agreement, which “has demonstrated that the regional economic activity that has been generated has been beneficial for all three countries,” Timmons continued.

On Mexico: “[W]e all should be concerned if the letter and the spirit of the agreement [of USMCA] are not being followed,” Timmons told “Power & Politics” host David Cochrane. While Mexican President Sheinbaum “has indicated that she wants to make sure that the agreement is ratified for the future,” the proposed constitutional amendments “have … [been] problematic for the United States.”

• Mexico has also had “some issues with takings of private property of American manufacturers,” Timmons added. “Those things can’t stand, so those are issues that will have to be addressed as the [USMCA] review process occurs in 2026, but hopefully the new administration in Mexico will address those things before then.”

Tariffs: Any tariffs imposed by the incoming Trump administration should be calibrated, said Timmons, whose visit to Canada also included meetings with Canadian Labour Minister Steven MacKinnon and Energy and Natural Resources Minister Jonathan Wilkinson.

• Tariffs should address “who’s causing the disruption, who’s causing the problem [and] … the policy that is causing the issue,” Timmons said. “And you need to really go right after that. Otherwise, [tariffs] are not going to be effective.”

“A manufacturing revival”: A respected, fully upheld USMCA is just one piece of the foundation that will usher in a new age of North American manufacturing, Timmons concluded.

• “[S]trengthening the manufacturing sector in the United States … [is] not just about trade,” he said. “In order to attract investment in the United States, we have to have the right tax policy, the right regulatory policies, the right workforce policies, the right energy policies, and the president-elect seems to be focused on all of those areas as well.”
• “So I feel pretty good about a manufacturing a continued manufacturing revival and renaissance in the United States. I think that’s good for the whole region.”

The “30C” tax credit has the potential to spur manufacturing investment, but the Internal Revenue Service and Treasury Department must first clarify some of their proposed rules regarding it, the NAM said this week.

What’s going on: In September, the IRS and Treasury Department jointly proposed regulations regarding Section 30C of the U.S. tax code’s Alternative Fuel Vehicle Refueling Property Tax Credit, which was changed and expanded by the Inflation Reduction Act of 2022.

• “A key purpose of the energy provisions of the IRA was to reduce greenhouse gas emissions and spur manufacturing investments in low emissions and renewable energy sectors,” NAM Vice President of Domestic Policy Chris Phalen told the IRS on Monday.
• “Manufacturers make vehicles that use alternative fueling stations, many of our members produce the components … that go into these stations and manufacturers will construct and operate these refueling properties. These companies require certainty and specificity to make final investment decisions.”

What must be done: To that end, the NAM told the agencies the following changes should be made to the proposed regulations for the 30C tax credit:

• Extend the allowed transition period for organizations to update “census tract designations to reflect population data in the years 2016–2020,” as the draft rulemaking mandates that those wishing to take advantage of the 30C credit “must place the property into service within a specific census tract designation.”
• Clarify whether the location of the refueling infrastructure “would need to be made available to the public to qualify for the 30C tax credit.”
• Provide tax credit “eligibility for certain property directly attributable to the operation of alternative fuel vehicle refueling property, such as electrical panels and conduit/wiring, and ask that the agency also consider related construction and other project costs for eligibility.”

The international tax system put in place by 2017 tax reform bolsters American competitiveness and supports manufacturing in the U.S.—and that’s why its provisions must be preserved, according to a new policy explainer, part of the NAM’s Manufacturing Wins campaign.

The background: Before passage of the Tax Cuts and Jobs Act, the U.S. tax code made it more costly and less efficient to invest in the U.S. Corporate profits were taxed at the 35% corporate income tax rate when repatriated to the U.S., forcing businesses to keep revenues abroad.

• Tax reform instituted a new, pro-growth international tax regime that incentivizes companies to locate their operations, intellectual property and profits here in the U.S.

The specifics: Tax reform’s international tax provisions include the following:

• A 21% corporate tax rate: Tax reform reduced the corporate rate from 35% to 21%, making “the U.S. a more attractive home for manufacturing investment.”
• The Foreign-Derived Intangible Income deduction: This deduction “reduces taxes for companies that locate job-creating, export-producing intellectual property in the U.S.”
• The Global Intangible Low-Taxed Income regime: The GILTI regime imposes a U.S. minimum tax on income earned abroad in low-tax jurisdictions.
• The Base Erosion and Anti-Abuse Tax: The BEAT applies to certain payments that shift companies’ profits abroad.

Why it’s important: Globally engaged manufacturers face the possibility of significant tax increases at the end of 2025 as key international tax provisions are scheduled to change.

• The FDII deduction will decrease, while the effective GILTI and BEAT tax rates will both increase—upsetting the balance inherent in the TCJA international tax structure and thus making it more costly and difficult for globally engaged companies to operate here in the U.S.

What’s next: In addition to maintaining or reducing the 21% corporate tax rate, the NAM is calling on Congress to prevent the FDII decrease and the GILTI and BEAT tax increases on manufacturers whose success bolsters America’s competitiveness on the world stage.

The last word: “Congress must sustain tax reform’s international tax system, including the lower corporate tax rate, in order to enhance America’s competitiveness and support manufacturers’ efforts to create jobs and grow investment here in the United States,” said NAM Vice President of Domestic Policy Charles Crain.