Policy and Legal

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.

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.

Manufacturers operate in a world of complex legal and regulatory challenges. In the wake of a national election, with a new administration and Congress on the horizon, those challenges are amplified, as in-house counsel must navigate a rapidly evolving compliance landscape.

The NAM’s third-annual Manufacturing Legal Summit, held Nov. 12–13 at the Willard InterContinental in Washington, D.C., helped in-house counsel at manufacturing companies map the road ahead. The event brought together nearly 150 such leaders from across the United States to share information and best practices.

The goal: “This is the only legal conference geared specifically for manufacturing lawyers,” said NAM Deputy General Counsel for Litigation Erica Klenicki. “What we hear consistently is that the opportunity to connect with others in the industry who are dealing with the same challenges is invaluable. Especially on the brink of a new administration and regulatory environment, we were able to provide connection and content that attendees found particularly helpful.”

The program: The Legal Summit covered a range of topics, including the following:

• Antitrust: A team of experts from Freshfields, including former FTC Commissioner Christine Wilson, joined with Saint-Gobain North America Senior Vice President, General Counsel & Secretary La-Toya Hackney to offer a candid deep dive into enforcement trends from the Biden FTC and what to expect from the new administration.
• Supply chain and ESG: Experts from Foley & Lardner joined Pelican Products Corporate Import/Export Compliance Manager Susan Cass to discuss the growing requirements surrounding supply chain transparency and integrity and best compliance practices for multinational companies.
• PFAS: Industry leaders from Greenberg Traurig provided a comprehensive overview of per- and polyfluoroalkyl substances, including the changing definition of PFAS, the regulatory landscape and how environmental marketing impacts risk, corporate strategy and consumer trust.
• Junk science: This product liability session offered strategies for combating junk scientific theories used to wage high-stakes litigation. It was led by experts from Shook, Hardy & Bacon, as well as Kimberly-Clark Corporation Associate General Counsel Kelly Vickers and Johnson & Johnson Assistant General Counsel Aviva Wein.
• NLRB: Experts from Fisher Phillips recapped the Biden Board’s sweeping changes to labor law and offered predictions on which changes will remain when the new administration takes the helm.
• Election debrief: NAM Managing Vice President of Government Relations Stef Webb offered attendees clarity and context on the 2024 general election, including the political outlook for manufacturers in a Republican-controlled Congress and White House.
• Regulatory law: Panelists from Kennametal, Saint-Gobain and U.S. Steel joined moderator Brendan Collins of Ballard Spahr to talk about recent landmark changes to administrative law and the impact of those decisions on their companies’ approaches to compliance and enforcement.
• AI: Counsel Eran Kahana from Maslon LLP led a thought-provoking discussion on the intersection of generative AI and legal ethics, including the due diligence obligations of in-house counsel as firms adopt this evolving technology.

The reaction: Participants spoke highly of the content and the opportunity for relationship building:

• “This was my first NAM Legal Summit, and I could not be more pleased with the topics presented, as well as the networking opportunities,” said Erin Tannock, compliance counsel for Viega LLC. “The content was relevant and current. I even had a few ‘aha’ moments! This event is worth the time, and I will be attending for years to come.”

On Nov. 5th, President-elect Donald Trump secured enough electoral college votes to become the 47th President of the United States. Republicans also flipped four Senate seats, meaning they will have a 53-47 majority entering the 119th Congress, and maintained control of the House though a small number of congressional races remain outstanding. For the first time since 2016, Republicans will have unified control of both Congress and the White House once President-elect Trump is sworn in on Jan. 20, 2025.

For now, as we enter the “lame duck” session of the 118th Congress, there remains a substantial laundry list of items for members to address before adjourning this session. Both the House and Senate return this week for the first time since the October break.

119th Congress Leadership Elections

Upon having control of both chambers next Congress, House and Senate Republicans returned to Washington this week to elect their respective leadership teams and establish their rules packages for the 119th Congress.

House Republican Leadership

• Speaker of the House – Mike Johnson (R-LA)
• House Majority Leader – Steve Scalise (R-LA)
• House Majority Whip – Tom Emmer (R-MN)
• House Republican Conference Chair – Lisa McClain (R-MI)
  Rep. McClain is replacing Elise Stefanik (R-NY) who has been nominated as Ambassador to the United Nations by President-elect Trump.

Senate Republican Leadership

• Senate Majority Leader – John Thune (R-SD)
  Sen. Thune will be taking over as GOP Leader from Mitch McConnell (R-KY), who is stepping down after a record 18 years in the position.
• Senate Majority Whip – John Barrasso (R-WY)
• Conference Chair – Tom Cotton (R-AR)
• Policy Chair – Shelley Moore Capito (R-WV)

House Democratic Leadership

House Democrats have scheduled their leadership elections for Nov. 19th. It is unlikely there are major changes for the current leadership roster.

• House Minority Leader – Hakeem Jeffries (D-NY)
• House Minority Whip – Katherine Clark (D-MA)
• House Democratic Caucus Chairman – Pete Aguilar (D-CA)

Senate Democratic Leadership

Senate Democrats have not currently scheduled their leadership elections, but it is unlikely the top two positions change. There will be an opening for the third ranking position with Senator Debbie Stabenow (D-MI) retiring.

• Minority Leader – Chuck Schumer (D-NY)
• Minority Whip – Dick Durbin (D-IL)
• Chair of Policy and Communications Committee – To be determined
  Debbie Stabenow (D-MI) is retiring from Congress. Amy Klobuchar (D-MN) and Cory Booker (D-NJ) have signaled their interest in this position.

Lame Duck Legislative Outlook

Congress has roughly five legislative session weeks before the Christmas break and several policy items to address in that time. Upon returning to Washington, policymakers face two must-pass pieces of legislation: the FY 2025 National Defense Authorization Act and a government funding package to prevent a shutdown when current funding runs out at midnight on Dec. 20th. On either NDAA or the government funding package, lawmakers may seek to include some form of disaster relief for victims of the recent hurricanes and an extension of the current Farm Bill.

In the Senate, it is likely that Democratic Majority Leader Chuck Schumer will move to advance as many of President Joe Biden nominees, including judicial appointments, as possible in the remaining weeks before Republicans take control of the confirmation process next year. Finally, the current debt limit suspension expires on Jan. 2, 2025. Congress will have to address the limit, or Treasury will be forced to take “extraordinary measures” to avoid a default in early 2025.

With these remaining weeks, the NAM continues to engage and encourage lawmakers to advance manufacturers’ priorities before Congress adjourns for the year.

When employers tell workers that unionizing would harm employee–manager relationships, they might be violating federal law, the National Labor Relations Board ruled last week (Law360, subscription).
 
What’s going on: “Telling workers that a union would come between them and their bosses may violate the National Labor Relations Act because it’s an effective threat to end workers’ direct relationships with management, a majority comprising the board’s three Democrats said [last] Friday in a case involving Starbucks.”

• The groundbreaking decision overturns nearly four decades of precedent. In its 1985 Tri-Cast ruling, the NLRB allowed employers to tell employees that unionization would strain worker–manager relationships “so long as they didn’t explicitly or implicitly threaten employees” when doing so (JD Supra).
• The NLRB said such cases will now be decided on a case-by-case basis.

Looking ahead: The ruling will only apply to future cases, however, “allowing past communications under the Tri-Cast standard to stand without retroactive penalties” (JD Supra).

Washington, D.C. – The National Association of Manufacturers has launched a seven-figure video and digital advertising campaign urging Congress to pass legislation this year to bring much-needed reform to pharmacy benefit managers, whose practices increase health care costs for manufacturers and manufacturing workers. 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.

“Manufacturers are clamoring for Congress to rein in PBMs this year. The momentum is with lawmakers to enact comprehensive reform in both the government and commercial health insurance market that increases transparency and reduces prices for everyone,” said NAM President and CEO Jay Timmons. “Manufacturing workers and retirees are spending more at the pharmacy counter, in large part because insurer-owned PBMs drive up their own profits by inflating prescription drug prices and pocketing discounts that biopharmaceutical manufacturers intended to be passed on to patients.”

Timmons continued, “Congress has an extraordinary opportunity in the lame duck to pass transformative legislation that increases transparency into PBMs’ business practices, delinks PBM compensation from drug prices and puts patients first.”

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

With a new administration and Congress on the horizon, the NAM is signaling confidence in its ability to secure wins for manufacturing in the United States, highlighting both recent achievements and policy priorities moving forward.

“The NAM has always focused on what’s best for manufacturing in America, and our track record speaks to that,” said NAM Executive Vice President Erin Streeter. “Our approach is consistent because we know what it takes to get results.”

What we’ve delivered: With post-partisan engagement, the NAM has achieved historic policy wins across both recent administrations, including:

• Tax reform: The NAM’s advocacy helped shape the 2017 tax cuts, driving billions in savings that manufacturers have reinvested in jobs, innovation and facility upgrades.
• Regulatory certainty: The NAM has played a pivotal role in streamlining regulations, reducing compliance costs under the Trump administration and working to slow regulatory expansion during the Biden years.
• United States-Mexico-Canada Agreement: The NAM was a key advocate for USMCA, safeguarding U.S. jobs by ensuring fairer competition and greater access to key markets.
• Energy advances: NAM-backed policies have supported growth in domestic energy production, creating a more stable energy market.
• Infrastructure and CHIPS Act: The NAM was instrumental in securing the historic Bipartisan Infrastructure Law and the CHIPS and Science Act, both critical for modernizing the economy, bolstering national security and ensuring a reliable semiconductor supply.

“These wins demonstrate what we bring to the table,” Streeter said. “By staying focused on manufacturing’s priorities, we can partner effectively with the new administration and Congress to create and protect jobs and strengthen communities.”

Looking ahead: The NAM’s focus on core issues remains critical for keeping the sector competitive and resilient, Streeter continued. These issues include:

• Securing tax reform: The NAM’s “Manufacturing Wins” campaign aims to lock in key 2017 tax provisions that manufacturers rely on for stability and growth. “Tax reform has been a game-changer,” said Streeter. “Protecting that progress means more jobs and manufacturing-led growth across the country.”
• Regulatory certainty: The NAM is advocating for balanced regulations that support competitiveness. “Manufacturers thrive with clear, fair rules,” Streeter noted. “We’re making sure Washington understands the importance of regulatory stability—and the danger of excessive regulation.”
• Energy security: The NAM is working to secure reliable, affordable energy while fostering innovation in sustainability. “Energy security and grid reliability are top of mind for every manufacturer,” Streeter added. “We’re ensuring manufacturers can continue to innovate, grow and drive America forward.”

Bottom line:  The NAM remains focused on advocating for policies that strengthen U.S. manufacturing. “Our success is built on trust and influence,” Streeter said. “Our members know the NAM is a constant force, with the relationships and expertise to deliver, regardless of political changes.”

In related news, President-elect Trump has named campaign manager Susie Wiles as White House chief of staff (Reuters, subscription), a choice NAM President and CEO Jay Timmons called “a powerful move to bring bold, results-driven leadership to the White House from day one.”

The NAM recently interviewed Sen. Maggie Hassan (D-NH) on the importance of reinstating immediate expensing for companies’ research-and-development expenditures. Here’s the full interview:

NAM: Sen. Hassan, Congress is facing a “Tax Armageddon” next year, as crucial provisions from 2017’s Tax Cuts and Jobs Act are set to expire. As a member of the Senate Finance Committee, what is your focus moving into next year’s debate?

Sen. Hassan: Next year, we will need to work to pass a tax cut package to support both American families and businesses. The package should build on the one that was negotiated in the Senate earlier this year, including a restoration of the full R&D tax deduction to support innovative businesses. The R&D tax deduction is an area where I have been particularly engaged in negotiations, and it is vital for our national security and economic competitiveness. We need to ensure that our tax policy fosters innovation, promotes the creation of good-paying jobs and keeps the United States at the forefront of technological advancement. We also need to prioritize a bipartisan expansion of the Child Tax Credit to support hardworking families and a bipartisan expansion of the Low-Income Housing Tax Credit to address our country’s housing shortage. I will continue to push for these critical measures throughout negotiations.

NAM: As you know, for nearly 70 years, manufacturers in the U.S. were able to fully deduct their R&D expenses in the year incurred. Beginning in 2022, however, manufacturers were forced to spread their deductions over several years, greatly harming our ability to grow and compete. What is Congress doing to restore immediate R&D expensing?

Sen. Hassan: I first introduced bipartisan legislation with Sen. Todd Young to restore the R&D deduction back in 2020, and we’ve been pushing for its passage since. The R&D tax deduction has wide bipartisan support—our measure supporting full R&D expensing passed 90–5 in the Senate in 2022. Recently, we had a bipartisan tax cut package that included the R&D tax deduction’s restoration, but unfortunately, it was blocked in the Senate, despite passing the House with an overwhelmingly bipartisan 357–70 vote. It’s disappointing and frustrating.

NAM: During your time as senator, you have seen how impactful R&D is for manufacturers to be able to compete on a global level. As we get closer to next year, what are you hearing from stakeholders on the need for pro-growth tax policy so American businesses can engage and grow around the world?

Sen. Hassan: The message I’m getting is clear—we can’t afford to fall behind in the global R&D race; it’s about American competitiveness and national security. Countries like China are offering massive incentives, including a 200% super-deduction for R&D. That puts American businesses at a real disadvantage, and I’m already hearing from business leaders across New Hampshire about how the expiration of the tax deduction is impacting their ability to plan for and make the investments that drive our economy forward.

There’s a critical national security component here too. We need to be at the forefront of designing, implementing and controlling new technologies, including those used for our national defense.

NAM: Thank you, Sen. Hassan. What else can NAM members do to stay engaged and be a resource for you going into next year?

Sen. Hassan: Your advocacy is crucial. I encourage NAM members to keep speaking up about the ways in which R&D and tax policy specifically impacts your businesses and communities, as well as the need for bipartisan compromise. Doing so is invaluable in shaping effective legislation and getting it across the finish line.