Policy and Legal

The Office of the U.S. Trade Representative published an official request for public comment yesterday on the U.S.–Mexico–Canda Agreement. The notice is part of the process for the schedule six-year review of the landmark agreement, which the NAM helped to shape and secure back in 2019.

The timeline: The deadline for comments is Nov. 3, ahead of a USTR hearing on Nov. 17.

The topics: The notice includes specific topics that the USTR would like respondents to address, including:

• “Any aspect of the operation or implementation of the USMCA”;
• “Any issues of compliance with the Agreement”;
• “Recommendations for specific actions that USTR should propose ahead of the Joint Review to promote balanced trade, new market access and alignment on economic security with Mexico and Canada”;
• “Factors affecting the investment climate in North America and in the territories of each Party, as well as the effectiveness of the USMCA in promoting investment that strengthens U.S. competitiveness, productivity and technological leadership”; and
• “Strategies for strengthening North American economic security and competitiveness, including collaborative work under the Competitiveness Committee, and cooperation on issues related to nonmarket policies and practices of other countries.”

Mexico’s notice: The government of Mexico also opened a 60-day window for public comment.

• For NAM members seeking to comment through their affiliates, the notice can be accessed here.

What NAM members should do: The NAM is issuing an urgent call for member feedback on specific nontariff barriers.

• This feedback might be part of bilateral talks with Canada and Mexico, and so should be sent to the NAM as soon as possible, the NAM’s trade experts stressed. The NAM will be submitting a draft letter to the USTR summarizing manufacturers’ priorities for policymakers.

The NAM’s focus: The NAM asks that members focus on four broad topics:

• Technical fixes to make the USMCA function better
• Bilateral issues in Mexico or Canada that the review could help address
• New mechanisms or tools that could be built to counter shared challenges in third markets, particularly nonmarket economies
• Sector-specific agreements or commitments that could be pursued to strengthen North American manufacturing

Get in touch: If you are interested in contributing to this important message about an essential pillar of U.S. trade policy, please contact NAM Director of International Policy Kevin Doyle.

Abuse of the 340B program has caused manufacturers’ health care costs to rise, as they miss out on negotiated drug manufacturer rebates. Reforms are necessary, the NAM told Congress this week.

What’s going on: “The 340B program, intended to provide lower cost medicines and expand care for low-income and underserved patients, has rapidly and massively expanded beyond its intent,” NAM Vice President of Domestic Policy Jake Kuhns told House Subcommittee on Oversight Chair David Schweikert (R-AZ) and Ranking Member Terri Sewell (D-AL) on Tuesday ahead of a hearing on tax-exempt hospital spending.

• “Many covered entities, which include tax-exempt hospitals, have taken advantage of the program to increase their profits. This has added to health care costs for manufacturers.”
• The 340B program allows participating hospitals and clinics to charge patients’ insurance the full list price for pharmaceuticals that were purchased at a discount. Patients then become ineligible to receive negotiated drug rebates, as duplicate discounts are prohibited by law.
• Hospitals keep the spread, boosting their profits, as manufacturers and manufacturing workers pay more for health care.
• Dr. Ge Bai, professor of health, policy, and management at
  Johns Hopkins Bloomberg School of Public Health, noted the substantial profits for hospitals and lack of transparency in the 340B program in her opening statement at the hearing.

The costs: “The expansion of [the 340B] program was associated with approximately $23 billion in additional employer-based health care expenses in 2023, of which employees paid about $4.5 billion per year in added insurance premiums,” or approximately $137 in additional annual premium payments for a single person and $415 for family coverage, the NAM pointed out.

• Lost drug manufacturer rebates account for “a $5.2 billion increase in health care costs for self-insured employers and the 103.4 million workers they employ.”
• Christopher Whaley, associate director of the Center of Advancing Health Policy through Research at Brown University, raised this issue in his opening statement as well.

What should be done: The Health Resources and Services Administration recently announced a rebate model pilot program for drugs subject to both the Medicare Drug Price Negotiation Program and 340B.

• This is an important first step in increasing transparency and accountability in the 340B program, the NAM noted.
• The NAM “encourage[s] Congress to consider additional 340B reforms that would reduce health care costs for manufacturers and manufacturing workers,” Kuhns told the subcommittee.

Arizona Chamber of Commerce & Industry President and CEO Danny Seiden testified before the House Energy and Commerce Committee about the burden that stringent emissions regulations inflict on businesses without providing any environmental benefit.

Speaking as an Arizonan: “Arizona businesses aren’t asking for a free pass … just a fair chance to grow responsibly,” Seiden told legislators.

• “Arizona is at the center of America’s growth story. … A symbol of that growth is TSMC’s decision to invest $165 billion in Arizona—the largest foreign direct investment in U.S. history,” he pointed out.
• Arizona has managed to achieve record growth while also reducing emissions, he noted: “Since 1990, our state’s population has skyrocketed, our GDP has risen more than 550%, and vehicle miles traveled have soared. Yet overall emissions are down more than 70%.”
• “That’s proof that economic growth and cleaner air can go hand-in-hand.”

Beyond the state’s control: In addition, Arizona’s ozone emissions levels are caused largely by factors it cannot control, Seiden said.

• “In fact, approximately more than 80% of our ozone comes from other states, from Mexico and Asia, and natural events like wildfires.”
• “Even if we shut down every industrial source in the state and took every car off the road in Phoenix, an area about the size of Connecticut, we wouldn’t meet the standard,” he added. “Still, Arizona businesses are penalized as if they are responsible.”

The costs: This regulatory burden threatens crucial industrial and infrastructure projects that are “vital to national security,” Seiden warned.

• “If companies can’t build here, they’ll build somewhere else—likely in countries with weaker standards. That’s a lose–lose scenario.”
• “To make matters worse, unlike states with long industrial histories, Arizona has no emissions reduction credits, or offsets, to rely on,” he noted. “So when a new facility wants to break ground, or an existing one wants to expand, there are no offsets available to purchase.”

The bigger picture: Arizona’s problem is the nation’s problem, Seiden emphasized, as states work to attract and support major manufacturing investments—“especially if standards continue to be set at or below natural background levels.”

A good start: Seiden praised EPA Administrator Lee Zeldin, saying, “Administrator Zeldin came to our state early on and took action. By rescinding outdated Section 179B guidance, signaling flexibility on unfair nonattainment classifications and recognizing the difference between controllable and uncontrollable sources, EPA is moving toward fairness.”

A prescription for change: Seiden made a list of recommendations for policymakers that would advance Arizona’s and the country’s economic growth:

1. Protecting competitiveness by keeping standards realistic 
2. Codifying reforms to Section 179B
3. Incentivizing upwind controls
4. Modernizing permitting
5. Encouraging innovation and collaboration
6. Strengthening cooperative federalism by allowing states to approve projects if the EPA fails to act within a reasonable time frame

The last word: “Give us the flexibility and tools to continue reducing emissions while ensuring that industries vital to Arizona’s economic future are not sanctioned out of existence,” Seiden told legislators.

Washington, D.C. – On the heels of the landmark tax bill’s passage, manufacturers’ optimism has jumped—even as challenges persist across the sector. The National Association of Manufacturers’ Q3 2025 Manufacturers’ Outlook Survey found a 10-percentage-point increase in confidence, with 65.0% of respondents reporting a positive outlook for their companies, up from 55.4% in Q2.

Yet, consistent with last quarter, respondents pointed to the same top business concerns—each edging higher than in Q2:

• Trade uncertainty: 78.2% (up from 77.0%)
• Rising raw material costs: 68.1% (up from 66.1%)
• Increasing health care costs: 65.1% (up from 60.0%)

“These results confirm what we’ve seen in the economic data—that the sector is still enormously challenged as manufacturing output took four months to recover from this spring’s dip, and optimism still falls below the survey’s historical average of 74%,” said NAM President and CEO Jay Timmons.

“To supercharge the increase in optimism we’re starting to see, manufacturers need certainty across a full manufacturing strategy spanning sensible trade policy, permitting reform to unleash American energy dominance, modernized regulations and workforce investments,” Timmons said. “Put another way, so long as this uncertainty persists, manufacturers will not be able to tap fully into the strength of President Trump’s monumental and historic tax provisions, championed by our allies in the White House and Congress.”

“The third quarter optimism level aligns with August’s production data released by the Federal Reserve, which showed that manufacturing output was 100.3% of its 2017 average, barely above March’s level of 100.2%, taking four months to recover from April’s drop,” said NAM Chief Economist Victoria Bloom.

“At the same time, manufacturers are projecting moderate growth over the next 12 months with production expected to rise 2.5% (up from 1.4% in Q2) and capital investments 1.0% (up from 0.3%),” Bloom said. “Costs are still expected to climb, but at a slightly slower pace than Q2, with raw material and input costs projected to increase 5.4% (down from 5.8%) and product prices up 3.7% (down from 4.3%). These findings reflect both the resilience of the sector and the real challenges still weighing on growth.”

The NAM releases these results to the public each quarter. Further information on the survey is available 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 $2.93 trillion to the U.S. economy annually and accounts for 53% of private-sector rese arch 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 recent invention by ExxonMobil could significantly change the electric vehicle battery game: a new kind of graphite (Bloomberg, subscription).

What’s going on: “We’ve invented a new carbon molecule that will extend the life of the battery by 30%,” Chairman and CEO Darren Woods said at the University of Texas at Austin’s Energy Symposium last Friday. He added that it’s a “revolutionary step change in battery performance.”

• Graphite plays a critical role in lithium-ion EV batteries, which the energy giant invented in the 1970s. The crystalline form of carbon helps lithium, a crucial battery component, maintain structural integrity and ensures that the batteries remain stable during charging and discharging cycles.
• ExxonMobil announced last week that it had acquired “key assets and technology” from Chicago-based graphite firm Superior Graphite to “complement [its] planned entry into the battery anode graphite market.”

Why it’s important: “Used on the anode side of the battery, the synthetic graphite allows for faster charging, a longer lifespan and longer range for electric vehicles.”

What’s next: While ExxonMobil isn’t planning to go into EV battery production, it says it will use its refineries, laboratories and plants to manufacture some of the materials for batteries—and begin extracting lithium, too.

• “[W]e do have capability of transforming molecules, and there are enormous opportunities in that space to use hydrogen and carbon molecules to meet the growing demand,” Woods said.

The NAM is urging the Department of Justice to address the patchwork of state laws that are driving up costs and threatening U.S. manufacturing competitiveness.

• The DOJ requested public input on state laws that have “significant adverse effects on the national economy or interstate commerce,” by either creating barriers for businesses operating nationwide or undermining federal authority.

Why it matters: Manufacturers face rising compliance burdens and liability risks as they attempt to fulfill inconsistent mandates across 50 states.

• Small and medium-sized manufacturers already spend more than $50,000 per employee each year on federal compliance, and the regulatory conflicts among the states are increasingly adding to those costs.

Our take:  The NAM weighed in on more than a dozen regulatory priorities in environmental, energy, tech, health and food and beverage policy, emphasizing the following principles:

• Manufacturers need certainty. Legal and regulatory predictability is essential for manufacturers to invest, grow and create jobs.
• Federal preemption is critical where appropriate. Uniform national standards are needed in areas like AI, pharmaceuticals, food ingredient safety and labeling, greenhouse gas emissions and securities disclosures.
• Tort reform is urgent. Exploitive state lawsuits create conflicting outcomes and massive defense costs and divert resources away from innovation and job creation.

The bottom line: “Manufacturers need straightforward, standardized rules of the road that allow our industry to invest confidently, adopt new technologies swiftly and focus resources on productivity and jobs, ensuring America remains a leader in the global economy,” NAM Vice President of Domestic Policy Jake Kuhns told the agency.

Washington, D.C.—The National Association of Manufacturers and CTIA today released a new joint report highlighting the key role 5G is playing in manufacturing in America. The report, “How 5G Is Modernizing Manufacturing,” explores how manufacturers and wireless providers are leveraging robust commercial 5G networks to fuel the Manufacturing 4.0 movement and make American factories safer, more efficient and more innovative—all while building a more resilient, secure and prosperous nation.

The report finds that to continue our rich history of innovation, production, and global leadership, America needs a robust 5G strategy that includes a pipeline of more licensed spectrum to support manufacturers’ ever-expanding use of 5G.

“5G is vital to the Manufacturing 4.0 movement that’s propelling America to be the global hub for smart, modern manufacturing,” said NAM President and CEO Jay Timmons. “Manufacturers are harnessing 5G to make workplaces safer, boost efficiency and strengthen resilience across our operations. By enabling real-time actions and supporting new technologies like AI, 5G is giving manufacturers more tools to sharpen our competitive edge, support more people and secure America’s leadership in the global economy.”

The wireless and manufacturing sectors are working together to leverage 5G’s unprecedented speeds, low latency and high capacity to power new innovations—particularly through the use of AI.  According to the 2025 Future of Manufacturing Project Survey, “Shaping the AI-Powered Factory of the Future,” from the Manufacturing Leadership Council (the NAM’s digital transformation division), more than half of manufacturers already use AI in their operations, with 61% expecting investment in AI will increase by 2027. Impact on operational performance, cost savings and worker productivity/efficiency are all above 60%. 5G helps manufacturers deploy AI tools so they can evaluate large datasets and identify efficient solutions quickly—whether through supply chain management, predictive maintenance for machinery, quality control or improving the employee experience.

“The wireless industry is proud to partner with manufacturers to drive American innovation, productivity, and global leadership,” said CTIA President and CEO Ajit Pai. “To support the wireless data needs of manufacturers and other leading U.S. industries, it is imperative that  policymakers continue to take action to ensure additional mid-band spectrum is available for 5G.”

The report features real examples of how 5G is transforming manufacturing, including by:

• Powering VictoryXR and Taqtile’s AR headsets to provide immersive training, offering engaging upskilling opportunities while enhancing employee productivity and safety;
• Connecting Seegrid’s autonomous mobile robots to deliver heavy appliance parts safely around Whirlpool’s factory floor, freeing up employees for more complex tasks;
• Providing a real-time, high-definition monitoring system that leverages machine learning capabilities to improve quality control for Hitachi, identifying defects at a sub-millimeter level;
• Protecting Cummins’ intellectual property with highly secure 5G networks that also power robotics to bring materials around the facility, detect product defects, enhance employee training through AR/VR applications, and monitor equipment via sensor systems; and
• Powering innovation and productivity on the factory floor for many other manufacturers like Newport News Shipbuilding, General Motors, Rockwell Automation, Ericsson, Samsung, and more.

These innovations are driving the U.S. economy forward. Boston Consulting Group found that 5G networks will add $1.5 trillion in GDP and 4.5 million in jobs to America’s economy this decade alone.

As this report makes clear, 5G is not just a next-generation network—it’s the foundation for the future of manufacturing in America. By accelerating innovation, enhancing safety, enabling real-time decision-making and strengthening our industrial base, 5G empowers manufacturers to lead in a fiercely competitive global economy.

-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 $2.90 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.  

Mexico announced this week that it will raise tariffs by 50% on automobiles made by China and other Asian countries (Reuters, subscription).

A broad effort: The increase is part of a broad range of trade policy changes, “which will increase tariffs to varying degrees on goods across multiple sectors including textiles, steel and automotive [vehicles], would impact $52 billion of imports.”

• Mexican tariffs on Chinese cars currently stand at 20%.
• Other policy changes include a 35% tariff on steel, toys and motorcycles and tariffs on textiles of between 10% and 50%.

The rationale: “[Mexican Economy Minister Marcelo] Ebrard said the measures, which come just within limits imposed by the World Trade Organization, were intended to protect jobs in Mexico as Chinese cars were entering the local market ‘below what we call reference prices.’”

The big picture: Analysts see this move as an effort to align Mexican trade policy with the Trump administration’s aims, as the two countries continue to negotiate over their own trade ties.

• President Trump has urged U.S. trading partners to reduce their economic ties with China on security grounds.
• “‘The U.S. is not going to allow China to use Mexico as a backdoor,’ said Mariana Campero of the CSIS Americas Program, adding that Mexico has doubled its trade deficit with China in the last decade, hitting $120 billion last year.”

USMCA: The U.S.–Mexico–Canada Agreement, which the NAM was instrumental in achieving during President Trump’s first term, is up for review in 2026.

• The NAM remains one of the foremost backers of North American trade, at a time when one-third of all imported manufacturing inputs now come to the U.S. from Canada and Mexico.
• The trade agreement has also been crucial in helping the U.S. outcompete China; today, U.S. imports of manufacturing inputs from North America are more than three times the quantity imported from China.

Making “draconian changes” to the Securities and Exchange Commission’s regulatory approach to non-U.S. companies could result in reduced foreign investment in U.S. manufacturing, among other negative repercussions, the NAM told the agency this week.

What’s going on: The NAM has urged the SEC to “proceed cautiously” in considering changes to the definition of “foreign private issuer,” which are foreign-owned companies with shares that trade on American stock exchanges.

• FPIs have raised capital from U.S. investors and invested billions of dollars to expand their U.S. manufacturing operations, a trend that is expected to continue during the second Trump administration.
• The SEC exempts FPIs from many of the disclosure requirements that apply to domestic companies because FPIs are presumed to be closely regulated in their home countries.
• However, in recent years, there has been a surge of FPIs that are headquartered in China and/or incorporated in the Cayman Islands, prompting concern among SEC officials about whether there is sufficient regulatory oversight of these companies and protection for their U.S. investors.
• The SEC is considering tightening the FPI definition, which would reduce the number of foreign firms that qualify for FPI regulatory relief. Such an action would increase compliance costs for those companies that lose their FPI status.

Why it’s important: Without the accommodations under the current definition, “it may be difficult for [FPIs] to retain their dual listings in the United States—potentially threatening their ability to access capital in the U.S. and expand their U.S. operations,” the NAM said.

• “While we share the [SEC’s] interest in protecting investors and ensuring that U.S. companies do not face undue regulatory burdens when competing with foreign firms, [overly strict adjustments] to the FPI definition … would have the unintended consequence of deterring foreign companies from raising the capital they need to expand their U.S. manufacturing operations,” the NAM told the agency, in response to an SEC call for public input on possible eligibility changes.

What should be done: The NAM outlined three alternative ways for a company to continue to qualify as an FPI:

• If it is traded on a major foreign stock exchange
• If it is based in a country with robust disclosure rules and investor protection regulations
• If its home country negotiates a Multijurisdictional Disclosure System agreement with the United States

In the eight months since President Trump took office, the NAM has worked closely with the administration on modernized regulations to address the regulatory burden that manufacturers are facing.

• With the industry shouldering $350 billion every year in regulatory costs, the NAM has called for dozens of regulatory reforms to support the industry’s growth.
• The administration has responded to the NAM’s advocacy, delivering manufacturing wins in the form of lifting the liquefied natural gas export ban, rescinding Securities and Exchange Commission guidance that had empowered activist investors, reconsidering the previous administration’s unworkable PM2.5 standard and more.

Now, the administration has released its Spring 2025 Unified Regulatory Agenda —which closely aligns with the NAM’s regulatory agenda and includes even more opportunities for collaboration between manufacturers and the administration.

What’s in it: The NAM has identified more than 120 opportunities for regulatory reform in the unified agenda, in policy areas ranging from labor, to energy, to finance and much more. While the NAM has been advocating for many of these changes since the beginning, the agenda also includes new chances for meaningful reform.

• The NAM is tracking all these potential victories for manufacturers, but three areas stand out as priorities, according to NAM Vice President of Domestic Policy Jake Kuhns.

Modernizing EPA rules: The EPA is finalizing reviews of several rules from the Biden administration that would have imposed substantial burdens on manufacturers: the PM2.5 NAAQS rule, the Power Plant Rule, the Good Neighbor Rule, multiple National Emission Standards for Hazardous Air Pollutants on ethylene oxide, the Toxic Substances Control Act risk evaluation framework, the Risk Management Program and the definition of “Waters of the United States.”

• Manufacturers see these Biden-era rules as unworkable and harmful to investment. The NAM will continue providing the industry’s perspectives to policymakers as they reconsider these regulations, Kuhns said.

Unlocking resources: The administration is pushing to reconcile the Interior Department’s critical minerals list and the Energy Department’s critical materials list—a goal the NAM has long supported.

• This reform could unleash manufacturers’ access to the raw materials required for the energy transition and the AI age, Kuhns noted.

Implementing tax reform: In the wake of manufacturers’ tremendous tax victory with the passage of H.R. 1, which made permanent many pro-growth tax provisions, the NAM is working closely with the administration to ensure the implementation of the law is as effective as possible for manufacturers.

• The NAM is helping to shape expedient, practical guidance that will maximize the benefits and minimize compliance burdens for manufacturers, Kuhns added.
• The tax law created a new deduction for manufacturing production facilities—a key implementation priority for the NAM.

The NAM says: “The breadth of the agenda—and its alignment with manufacturers’ policy priorities—creates real potential for transformative regulatory reform, and it’s clear the administration is hearing us,” said Kuhns. “The NAM will continue engaging agencies, convening member input and holding Washington accountable for practical, pro-growth outcomes.”