Policy and Legal

“To put it simply, investments in infrastructure are investments in manufacturing,” Husco President and CEO and NAM Executive Committee member Austin Ramirez told the Senate this week.

What’s going on: “Modern, dependable transportation helps manufacturers make and move our products,” Ramirez, whose company makes hydraulic and electromechanical control systems, told the Senate Committee on Environment and Public Works at a Wednesday hearing on crafting the next highway bill.

• Infrastructure projects “generate productivity gains and induce demand for manufacturing goods—stimulating the economy and bolstering American competitiveness,” said Ramirez.

Funding in action: Husco has seen firsthand the benefits of robust infrastructure investments, Ramirez continued.

• “Our customers are in the automotive and construction industries. And Husco families drive over the roads and bridges improved by highway projects. Several are turning dirt this year in Waukesha County.”

Why it’s crucial: Failure to reauthorize key surface transportation programs would result in interruption of these critical investments in U.S. roads and bridges, hitting manufacturers hard, Ramirez told the committee.

• “We cannot go back to the fits and starts of highway bill extensions. Our industry needs certainty to invest, plan and hire in America.”

Permitting reform: Ramirez also explained how America’s “complex permitting laws impact investment decisions” and encouraged the committee to adopt comprehensive permitting reforms that expedite project approvals and put a stop to “endless litigation.”

What should be done: Policymakers should “seize the opportunity” to make “robust investments in our surface transportation infrastructure,” Ramirez said. This should include efforts to strengthen the Highway Trust Fund, expand highway capacity and connectivity, implement intermodal improvements to bolster the country’s freight network and enact much-needed permitting reform.

Other voices: Other manufacturers recently sat down with the NAM and United for Infrastructure, where the NAM serves as a steering committee member, to discuss how infrastructure impacts their businesses. Leaders from CRH, Nucor and Fluor—sponsors of the NAM’s and United for Infrastructure’s Infrastructure Week kickoff event—spoke about the importance of infrastructure investments and modernizing our infrastructure to keep products moving and manufacturers operating.

• “As we look at reauthorizing the [Infrastructure Investment and Jobs Act] a really important piece of that was the higher baseline for federal highway formula funding, which we know through our experience with state DOTs needs to continue to grow in order to meet the needs of growing states,” said Fluor Senior Director of Government Relations Nathan Robinson.
• “If we’re going to truly harness the power of what AI is going to bring us, what machine learning’s going to bring us, all the things that truly are the future [of the] economy, we’ve got to get the way we move people and goods around in much better shape,” said Nucor Executive Vice President of Business Services Ben Pickett.
• “Permitting reform has absolutely got to happen for us. We’d like to see … a less prescriptive bill and more money go to the states through [the] funding formula. … When states have funding security and certainty, then they’re able to go raise revenues,” said CRH Executive Vice President of Government Relations Ryan Lindsey.

The last word: “Our industry depends on a robust, modern, efficient transportation system—and you can promote domestic manufacturing by getting a highway bill done this Congress,” Ramirez concluded.

Endless litigation has delayed much-needed American infrastructure development for decades—and that has to stop, as the NAM and manufacturers have long argued. The Washington Post (subscription) editorial board makes the case that Congress must step up and fix the permitting process to unlock American investment and growth.

Recent developments: The recent Supreme Court ruling that limited the National Environmental Policy Act—in which the NAM filed an amicus brief—is a step in the right direction.

• In that case, “The court decided that the U.S. Surface Transportation Board could approve an 88-mile train track even if it might move crude oil from Utah to refineries on the Gulf Coast,” the Post noted. “The board didn’t have to assess the potential future impacts if the new track encouraged more oil drilling on one end and more oil refining on the other.”
• In other words, environmental review was limited to the environmental impact of the project itself—as intended by the statute—rather than a more expansive investigation into the potential uses of the finished project.

A long-standing problem: Gaming the permitting process to stop development is nothing new.

• “In the 1970s, a ‘new’ species of freshwater fish called the snail darter was discovered during NEPA research into the building of the Tellico Dam in Tennessee.”
• “For the project to be completed, Congress had to exempt it from the Endangered Species Act. It turned out that the fish was not endangered. It wasn’t a separate species. Opponents of the dam ‘discovered’ it to get the dam stopped.”

More at risk: Numerous infrastructure projects are still in limbo today due to this sort of maneuvering by groups seeking to delay needed investments.

• “A flower called Tiehm’s buckwheat might stand in the way of a Nevada lithium mine green-lit by the Biden administration,” for example.
• But, as the Post noted, “Maybe the idea of protecting every ecosystem at any cost should be reconsidered. The flower, which apparently grows only on 10 acres in the proposed mine’s footprint, is a close relative of other buckwheats. Is it a distinct species? Perhaps it could be grown elsewhere?”
• And another important question: “Perhaps the battle against climate change—which will require lithium to build lithium-ion batteries to power electric vehicles—should take precedence?”

Calling on Congress: “NEPA review had grown to require every government decision to survive endless judicial challenges, poorly serving the nation and the natural environment in which it sits. Congress should not leave it to courts to fix,” the Post concluded.

The NAM agrees: “Comprehensive permitting reform is essential to building a strong and more competitive manufacturing economy. As [the Post] notes, Congress should reevaluate environmental impact reviews in order to ease construction of critical infrastructure projects,” said NAM Managing Vice President of Policy Charles Crain on X.

The Food and Drug Administration is considering a scientifically flawed method for detection of asbestos in talc-containing cosmetics products—a move that could have far-reaching implications across the manufacturing sector.

What’s going on: In December, the FDA published a proposed rule for detecting and identifying asbestos, as required by the Modernization of Cosmetics Regulation Act of 2022. But the proposal is based on unsound science that could limit companies’ ability to utilize talc, a key manufacturing input.

• The overinclusive testing methodology prescribed in the rule is highly likely to misidentify non-asbestos minerals as asbestos. That means that a “positive” test could classify talc as contaminated with asbestos—even if no asbestos is present.
• In May, the FDA held a roundtable discussion on the safety of talc, at which participants discussed the merits of expanding this de facto talc ban beyond cosmetics and to most if not all products and manufacturing processes.

Why the NAM is concerned: Beyond cosmetics, talc is used in a wide variety of industries—including pharmaceuticals, food, plastics, paper, automotives, rubber, roofing, paint, coatings, pottery and ceramics. It is also commonly used on shop floors throughout the industry.

• For many companies, talc substitutions may be inferior or may not exist at all.
• In addition, an FDA-endorsed standard prone to false positives is highly likely to distort other agencies’ asbestos detection testing methods and exposure analysis.

The NAM says: The FDA should withdraw the proposed standard and publish a new rule that contains scientifically sound and accurate testing methods.

• “Manufacturers support the use of sound science,” said NAM Managing Vice President of Policy Charles Crain. “The FDA has the opportunity to repromulgate this flawed rule to provide for accurate, science-based testing that actually protects consumers—rather than a flawed standard that could have far-reaching and costly consequences throughout the manufacturing industry.”

There’s a lot for manufacturers in the U.S. to celebrate right now, starting with the historic passage of the One Big Beautiful Bill Act with pro-growth tax provisions—but they are still seeking more policy fixes to help them grow and compete, the NAM said last week at the 14th annual John Hazen White Manufacturing Forum at The Brookings Institution.

Starting with tax policy: “When we think about the president’s manufacturing strategy, his manufacturing policies, you really have to start with tax policy,” NAM Managing Vice President of Policy Charles Crain said about manufacturing under the Trump administration.

• “We know from the 2017 Tax Cuts and Jobs Act the impact that pro-growth tax policy [had] on manufacturing in 2018 and 2019. Coming out of the TCJA, we saw record capital investments in the manufacturing industry. We saw record job increases. We saw record wage increases.”
• The One Big Beautiful Bill Act, signed into law on the Fourth of July, “prevents … tax increases, and it really should support manufacturers’ efforts to drive manufacturing growth,” Crain continued, adding that the OBBBA included incentives for capital equipment purchases, research and development, factory building and more.
• The legislation is “a big win” for manufacturing and “a real credit to the president,” he said.

Reaching a shared goal: Even if the U.S. were “operating at full capacity,” manufacturing in the country would still require imports from other nations—making a commonsense trade policy a necessity, Crain said.

• In practice, manufacturing in the U.S. is only making about 67% of inputs required for finished goods, Crain said.
• “So we really need to solve for that 30-ish percent of outstanding inputs that we need to make things here. … Manufacturers need inputs to make things, and we need export markets to sell things. And so we think that a commonsense trade policy can allow for the president to achieve [the administration’s] trade policy goals without preventing manufacturers from investing here in America, which is a goal we all share.”

Giving manufacturers certainty: In the latest quarterly NAM Manufacturers’ Outlook Survey, just 55% of manufacturers—the lowest reading since the global pandemic in 2020—reported feeling positive about their companies’ outlook, Crain said. The top reason for the optimism drop? Trade uncertainty, something that a comprehensive U.S. trade policy can help remedy.

• Not knowing what to expect next when it comes to trade “makes it more difficult to make long-term investment decisions that we know drive manufacturing growth,” according to Crain.
• While tax uncertainty has now “been taken off the table” thanks to the passage of the OBBBA, “we’re still facing additional barriers to those long-term decisions that we need to create jobs here in America.”
• It’s also critical to manufacturing in the U.S. that the current corporate tax rate be maintained, Crain said. “[I]f we have a 35% corporate rate as opposed to the current 21[%], it’s going to be really difficult to onshore domestic manufacturing.”

Fewer regulations needed: Manufacturing in the U.S. also needs more balanced regulations—and fortunately, that’s something the administration began doing on day one.

• “[M]anufacturers, in our experience, have been very encouraged to see the administration taking a second look at some of the rules that were finalized in recent years … finding ways to maintain reliable rules of the road, but [also] to make those rules less costly.”

Open jobs in manufacturing: Manufacturers also remain committed to filling the 400,000 open manufacturing jobs in the U.S., Crain said, addressing an audience question.

• Manufacturers “are really focused on providing competitive benefits, having flexible work schedules, having onsite child care” as well as “partnering with local community colleges to implement training programs [and] partnering with the military to bring folks coming out of active duty into manufacturing shop floors.”

The takeaways: The OBBBA “delivers for manufacturers in America by making pro-growth tax provisions permanent,” Crain wrote on X following the event.

• But “[t]o ensure we can continue to grow manufacturing in America, policymakers must pursue a comprehensive manufacturing strategy that will provide manufacturers the tools, and the certainty, needed to make long-term investments,” he wrote in a second post.

President Trump issued more tariff letters late last week, warning major U.S. trading partners of the tariffs that will go into effect if negotiations do not lead to agreements by Aug. 1. Tariffs on Canadian imports will be assessed at 35%, while Mexican and European Union imports will see new tariffs of 30%.

Canada: The letter to Canada accuses the country of failing to stop the flow of fentanyl drugs into the U.S., while also citing tariff and nontariff trade barriers, including dairy policies.

• Canada is subject to an International Emergency Economic Powers Act fentanyl tariff rate of 25%. According to an April 2 executive order, if IEEPA fentanyl tariffs are withdrawn, a 12.5% IEEPA “reciprocal” tariff rate would replace them.
• USMCA-compliant goods are exempt from the existing Canada tariffs. The July 10 letter does not specify whether goods that qualify for an exception under the USMCA will continue to be exempt. It also does not say whether energy and energy resources from Canada will still be subject to the lower 10% tariff.
• The letter also warns that goods that are transshipped will be subject to an unspecified, higher tariff, and that an additional 35% tariff will be imposed should Canada retaliate.

Mexico: The letter to Mexico cites the country’s “failure to stop the Cartels,” while also mentioning trade barriers.

• Mexico is subject to the same arrangement as Canada under the April 2 executive order—IEEPA fentanyl tariffs of 25%, which if withdrawn would be replaced by a 12.5% “reciprocal” tariff.
• The letter to Mexico is likewise unclear about the USMCA exceptions and contains similar warnings about transshipment penalties and an additional 30% tariff in the case of retaliation.

EU: The European Commission also received a letter, which threatens the EU with a 30% tariff, a number “far less than what is needed to eliminate the trade deficit.” The letter also says that the U.S. expects “complete, open market access.”

• EU retaliatory tariffs were set to take effect this week but have been suspended pending negotiations.

The response: In a  post on X, Canadian Prime Minister Mark Carney said, “We are committed to continuing to work with the United States to save lives and protect communities in both our countries. … We are strengthening our trading partnerships throughout the world.”

• In a statement, EU Commissioner Ursula von der Leyen said the EU is “working towards an agreement by August 1,” adding that the EU “will take all necessary steps … including the adoption of proportionate countermeasures if required.”

Technology firms are urging the administration to create a federal artificial intelligence framework following Congress’ removal from the recently passed budget bill of a 10-year moratorium on state AI laws (The Wall Street Journal, subscription).

What’s going on: “Tech industry insiders are lobbying for nationwide regulations that pre-empt a jumble of state laws … in part to simplify compliance with a single set of requirements,” according to one tech leader.

• California, Texas, Colorado and Utah have passed AI legislation, and an additional 15 states are considering similar laws.
• Almost “every state has adopted privacy and data-security legislation that touches on AI in some way, lawyers say.”

Manufacturers’ take: Large companies have indicated their willingness to comply with AI laws, with manufacturers backing national regulation.

• AI regulations at the federal level would “establish consistent standards and promote the secure, fair development of AI,” an Amazon spokesperson told the Journal. “We will continue to work with legislators at both the federal and state level to ensure any regulation drives standards that support U.S. leadership on AI.”

The “patchwork” problem: The creation of 50 different, often-conflicting rules will limit manufacturers’ ability to operate and innovate, as they have told Congress repeatedly.

• The NAM, which advocated for a decade-long pause on state-level AI regulations, told the Senate last month that the moratorium would “support AI innovation and American AI leadership by protecting manufacturers from a [50]-state patchwork of conflicting, and potentially stifling, AI laws and regulations. … [M]anufacturers need a policy and regulatory framework that … streamlines compliance to enable rather than hinder manufacturers’ development and adoption of AI systems.”

More to comply with: Technology companies with global reach must now also comply with the stringent EU Artificial Intelligence Act, which took effect earlier this year and “aims to control runaway AI development.”

Ongoing advocacy: The NAM continues to advocate for “the importance of a light-touch regulatory framework to support the development and use of artificial intelligence” at the federal level, including eschewing AI-specific regulations to address challenges that are not AI-specific and instead rely on technology-neutral laws, as NAM Managing Vice President of Policy Charles Crain told the House in May.

President Trump signed more individual country letters this week, following his extension to Aug. 1 of the pause on “reciprocal” tariffs over 10%.

A quick recap: The president had delayed tariffs on individual countries, which had been announced on April 2, until July 9. He imposed a flat 10% tariff until then on all countries except Mexico, Canada and China.

• This week, he extended that pause until Aug. 1. If new trade deals are not reached by then, individual country rates will go into effect.

More letters: The president had issued letters on July 7, assigning tariff rates to imports from more than a dozen countries and followed those up with more letters to other countries on July 9. The second round included Libya, Iraq, Algeria, Moldova, Brunei and the Philippines.

• The letters also warned that if countries impose retaliatory tariffs, U.S. levies will rise as well. The increases cited in the letters range from 25% to 50%.
• You can find a full chart here of the countries that have received letters, as well as those that were included in the April 2 order but have not yet received letters.

Targeting Brazil: The U.S. ran a trade surplus with Brazil in 2024, which means it was not included in President Trump’s imposition of tariffs in April.

• Decrying the legal proceedings against former Brazilian president Jair Bolsonaro along with social media censorship policies (as well as trade barriers), President Trump announced that the U.S. is imposing a 50% additional tariff on Brazil, which will rise another 50% should Brazil retaliate.
• President Trump also ordered the United States Trade Representative to open a Section 301 investigation into Brazil’s “attacks on the digital trade activities of American companies” and other unfair trade practices, which could result in other tariffs.

Section 232: In a Truth Social post, the president mentioned plans for Section 232 tariffs on copper.

• The administration will have to issue a proclamation and provide documents defining the scope of the tariffs, including which products are subject to them, so details are yet to come.

The NAM is monitoring the administration’s actions on Section 232 closely and has been detailing manufacturers’ interests and concerns for the administration. You can read about its advocacy here.

The NAM has long called for the comprehensive reform of pharmacy benefit managers, and on Thursday, Rep. Buddy Carter (R-GA) delivered for manufacturers.

What’s going on: Rep. Carter, along with a group of 11 bipartisan members of Congress, introduced the PBM Reform Act to curtail abusive practices by PBMs, which are underregulated middlemen that drive up health care costs for manufacturers and manufacturing workers.

• The NAM has been pressing hard for PBM reform for years.

What it would do: The PBM Reform Act consists of crucial PBM reforms that the NAM has long supported, including:

• Increasing transparency of PBM practices in employer-sponsored health insurance and Medicaid;
• Delinking PBMs’ compensation from prescription drug list prices in Medicare; and
• Banning spread pricing in Medicaid.

Why it’s important: “PBMs are middlemen that drive up health care costs and offer little value to the health care system,” said NAM Managing Vice President of Policy Charles Crain.

• “Small and medium-sized manufacturers are facing rising health care costs—and PBM reform will empower these businesses to offer competitive benefits to manufacturing workers. Manufacturers commend Rep. Carter for introducing legislation to enact much-needed PBM reforms, and we encourage Congress to take steps to curtail PBMs’ abusive practices.”

One week after the reconciliation bill was signed into law, making crucial pro-growth tax policies permanent, manufacturers are still celebrating.

Winton Machine Company CEO and Co-Owner and NAM Board Member Lisa Winton congratulated congressional leaders and the NAM on the passage of the bill, saying, “I would be remiss not to acknowledge the unwavering leadership and dedication shown over the past two years in driving the renewal of the tax package,” in a LinkedIn post.

The congressional effort: Winton thanked policymakers for their concerted effort in speaking to small manufacturers about the impact of these tax policies.

• “From holding hearings across the country to meeting directly with small business owners and CPAs representing thousands of clients, the commitment to understanding the real-world impact of not renewing the [Tax Cuts and Jobs Act] has been clear and consistent.”
• “Thank you … [House Ways and Means Committee] Chairman Smith for ensuring that the voices of Main Street were not only heard—but reflected in the policy discussions that shape our economy. Thank you Speaker [Mike] Johnson for working across the aisle and for taking the time to listen when I shared what the impact would be to not only my company but the entire industry.”
• “Thank you to President Trump, Vice President Vance, Majority Leader Scalise, Majority Whip Emmer, Conference Chair McClain and all the members of Congress who took the time to listen and take action.”

The NAM’s effort: Winton also gave a shoutout to the NAM, thanking President and CEO Jay Timmons, Executive Vice President Erin Streeter, Managing Vice President of Policy Charles Crain and the whole NAM staff for working “tirelessly on behalf of manufacturers of all sizes to make this happen.”

Manufacturers’ efforts: Winton also recognized the enormous advocacy efforts undertaken by manufacturing leaders themselves.

• “Thank you to all the manufacturers who took the time and money to get on a plane or invite members of Congress to their facilities so that they could be educated on what the future of American manufacturing looks like.”
• Winton herself played a key part in these efforts, testifying before an April 2023 field hearing of the House Ways and Means Committee on the importance of pro-growth tax policy.

The last word: “I am committed as a manufacturer to continue to help drive innovation and invest in the future manufacturing workforce here in the USA,” Winton affirmed.

In case you missed it, catch the NAM’s thank-you video celebrating the champions who made the One Big, Beautiful Manufacturing Law happen, featuring manufacturers of all sizes. And check out the NAM’s #ManufacturingMinute video on Instagram highlighting its advocacy efforts that helped get the bill across the finish line.

The Defense Department will buy $400 million of MP Materials’ preferred stock, becoming its largest shareholder, the company announced today (CNBC). MP Materials owns the only rare earth mine operating in the U.S. today at Mountain Pass, California.

The background: “Rare earths are used in magnets that are key components in a range of military weapons systems including the F-35 warplane, drones and submarines, according to the Defense Department.”

• The U.S. imports almost all its rare earths, with China supplying about 70% of imports in 2023, according to the U.S. Geological Survey.
• Rare earth imports from China have become a point of dispute in U.S.–China trade relations.

Looking ahead: “MP Materials will build a second magnet manufacturing facility in the U.S. to serve defense and commercial customers with support from the Pentagon. The facility, whose location wasn’t disclosed, is expected to start commissioning in 2028 and will bring MP Materials rare earth magnet manufacturing capacity to 10,000 annual metric tons.”

• The Pentagon will buy all magnets produced by the new facility for a period of 10 years after it is built.

What they’re saying: “We understand that this partnership is ultimately on behalf of the taxpayers and our national security, and with that comes a great responsibility to get this done right,” MP Materials CEO James Litinsky told investors in a call this morning.

• “Securing America’s supply of rare earth materials and magnets is essential to our economic and national security.”

The NAM says: “The NAM has long led the charge for diversifying sources of critical minerals both to strengthen manufacturing supply chains and to safeguard its national security,” NAM Director of Energy and Resources Policy Michael Davin said.

• “Investments like this one are an innovative way for the U.S. government to make good on its promise to manufacturers and the American people.”