Policy and Legal

The U.S. needs a strong, reliable and diverse health care supply chain, the NAM told the House Energy and Commerce Subcommittee on Health Wednesday ahead of a hearing.

What’s going on: National emergencies and natural disasters have proven the necessity of a diverse and resilient health care supply chain to ensure Americans have a stable supply of lifesaving medicines.

Why it’s important: “Global, resilient supply chains were essential during the pandemic and in the aftermath of Hurricane Helene to help fill gaps and minimize supply shortages or temporary disruptions,” NAM Managing Vice President of Policy Charles Crain said.

• Manufacturers are committed to onshoring pharmaceuticals manufacturing, he continued, adding that most medications taken by those in the U.S. are made in the country.
• However, some pharmaceutical ingredients cannot be sourced domestically, or cannot be obtained in sufficient quantities here, making “[i]mported inputs … vital to U.S. pharmaceutical production,” Crain continued.

Subcommittee’s take: Chairman Buddy Carter (R-GA) stressed the importance of the One Big Beautiful Bill Act, “which incentivizes domestic medical supply production,” as well as the elimination of “ burdensome regulatory barriers” in his opening statement.

• He also emphasized the need to “streamline processes that impede our competitiveness on the global stage and establish the proper incentives to ensure we are creating the environment to allow innovation to flourish.”

What’s next: The NAM encourages swift passage of the OBBBA by the Senate to support biopharmaceutical manufacturers.

• The NAM also recommends the House Energy and Commerce Committee mark up the Medical Supply Chain Resiliency Act, a bill that would “authorize the president to enter into trade agreements with allies and partners to remove barriers and duties with respect to medical goods, which would contribute to national security, public health and supply chain resiliency,” NAM Managing Vice President of Policy Charles Crain said.

The U.S. produced a record amount of energy in 2024, according to the U.S. Energy Information Administration.

What’s going on: “U.S. total energy production was more than 103 quadrillion British thermal units in 2024, a 1% increase from the previous record set in 2023. Several energy sources—natural gas, crude oil, natural gas plant liquids, biofuels, solar and wind—each set domestic production records last year.”

The details: Natural gas has been the primary source of American domestic energy production—accounting for approximately 28% of total energy production last year—every year since 2011.

• Crude “was a record 13.2 million barrels per day in 2024, 2% more than the previous record set in 2023.”
• Natural gas plant liquids, which are fuels extracted from the processing of natural gas such as ethane and propane, totaled a record 4 trillion cubic feet in 2024, up 7% from 2023 and accounting for approximately 9% of total U.S. energy production that year.

Other sources: Solar, wind and biofuels also set records in 2024.

• Solar and wind production increased by 25% and 8%, respectively, as new generating capacity was added.
• Biofuels—which comprise biodiesel, renewable diesel and ethanol, as well as other biofuels like sustainable aviation fuel—accounted for “a record 1.4 million barrels per day, up 6% from previous records set in 2023.”
• Output from geothermal declined slightly from 2023.

The NAM says: “This data is clear evidence of the strength and success of an all-of-the-above energy strategy,” said NAM Director of Energy and Resources Policy Michael Davin.

• “Given the growth of artificial intelligence and data centers, we will continue to need record levels of energy generation. By continuing down this path, we could reach our goal of U.S. energy dominance on the world stage.”

Mexico’s first judicial elections occurred on Sunday, and the results, while not yet completely final, raise questions about the integrity of the country’s judges going forward (AP News).

State of play: With more than 98% of the vote tallied as of Tuesday night, President Claudia Sheinbaum’s party is poised to control the Supreme Court, with a majority of judges holding ideological or political ties to the ruling party.

• Experts, allied nations and companies that do business in Mexico—including manufacturers—have voiced concerns that judicial elections will turn the judiciary into a political arm of the president’s party.

The background: Before leaving office, Sheinbaum’s mentor and predecessor President Andrés Manuel López Obrador forced through a controversial reform mandating elections for judges.

• The NAM has issued multiple warnings since these reforms were first proposed last year, telling Mexican officials in person that companies investing in Mexico need assurance that their portfolios will be protected under the new judicial regime.
• “We’re concerned that some of the reforms as proposed could harm Mexico’s standing as an attractive place to do business,” NAM Vice President of International Policy Andrea Durkin said on the “Imagen Empresarial” (“Corporate Image”) podcast in September. “Manufacturers pay attention to how banks are factoring these potential changes to the constitution into Mexico’s risk profile.”

More to come: “Votes were still being counted for the majority of the 2,600 federal, state and local judge positions up for grabs in Sunday’s elections.”

The NAM says: “A lack of confidence in Mexico’s judicial system could imperil future U.S. investments, particularly at a time of great uncertainty in trade relations between our countries,” said Durkin today.

Some economists are questioning the accuracy of recent U.S. inflation data—and say it could have big economic implications (The Wall Street Journal, subscription).

What’s going on: “The Bureau of Labor Statistics, the office that publishes the inflation rate, told outside economists this week that a hiring freeze at the agency was forcing the survey to cut back on the number of businesses where it checks prices.”

• In the April inflation report, government statisticians had to use a less precise price-change measurement method than they had used previously.

Why it’s important: The staffing shortage poses questions about the accuracy of recent and coming inflation reports, economists say.

The details: To determine the inflation rate, hundreds of government staffers known as enumerators disperse across U.S. cities, checking—often at brick-and-mortar locations—how much businesses are charging for goods and services.

• Statisticians pull that data into the consumer price index, which shows how the cost of living is changing for Americans.
• If enumerators can’t find specific prices, they make educated guesses based on close substitutes.
• But in April, with the hiring freeze on, they often had to “base their guesses on less comparable products or other regions of the country—a process called different-cell imputation—much more often than usual, according to the BLS.”

The effect: In the April inflation data, 29% of price guesses—a percentage twice as high as any month in the past five years—were made using these less-accurate comparisons.

• One economist told the Journal: “We don’t know if this is a big issue or a small issue, but we just know that directionally, it’s making things worse.”

President Trump on Tuesday evening signed a proclamation that doubled Section 232 tariffs on steel, aluminum and derivative products from 25% to 50%.

Why it matters: The move marks a significant escalation in trade policy, with no exemptions or exclusions—and has immediate implications for manufacturers relying on imported metals.

The details: The new rates took effect at 12:01 a.m. EDT on June 4. There is no exemption for goods on water.

• The proclamation builds on a Feb. 10 executive order that reinstated 25% tariffs on imports of steel, raised tariffs on aluminum from 10% to 25%, revoked all country exemptions and quotas, terminated all general production exclusions granted by the Department of Commerce and rescinded the department’s authority to process any new or renew any product exclusion requests.
• Unpublished annexes are expected to provide more clarity on product scope. Guidance from U.S. Customs and Border Protection is anticipated in the coming days.

Zoom out: President Trump says domestic production capacity remains underutilized and foreign producers continue to flood the U.S. market with low-priced goods—undercutting the competitiveness of the U.S. steel and aluminum industries.

• “Increased tariffs will more effectively counter foreign countries that continue to offload low-priced, excess steel and aluminum in the U.S.,” the proclamation reads.

Between the lines: The U.K. narrowly avoids higher tariffs—for now. Steel and aluminum from the U.K. remain at 25%, contingent on compliance with the U.S.–U.K. Economic Prosperity Deal. Rates could rise to 50% on or after July 9 if the U.K. falls short.

“Stacking” reshuffled: The June 3 proclamation shakes up the May 2 tariff “stacking” executive order with key changes:

• Canada and Mexico: Products subject to new 50% Section 232 steel and aluminum tariffs are not subject to International Emergency Economic Powers Act fentanyl tariffs.
• IEEPA “reciprocal” tariffs: For countries facing “reciprocal” tariffs, companies must pay the 10% on all non-aluminum, non-steel content—or face “severe consequences” for underreporting.

The NAM says: Amid ongoing trade negotiations, manufacturers continue to press for zero-for-zero tariff outcomes with top export markets, so they have the certainty they need to plan, hire and compete—while also gaining access to the globally sourced raw materials and critical minerals necessary to make things in America.

• As NAM President and CEO Jay Timmons has stated, “If we see more trade agreements, tax reform legislation and more regulatory certainty—as part of our comprehensive manufacturing strategy—manufacturers win. And when manufacturers win, America wins.”

What’s next: Even at full throttle—every machine running, every job filled—the industry can only produce 84% of the inputs necessary to meet demand. That means at least 16% of manufacturing inputs must be imported to grow domestic manufacturing. Stay tuned for a new proposal the NAM is announcing tomorrow morning.

With a large number of Americans still lacking reliable internet access, some states are looking to space to fix the problem (The Wall Street Journal, subscription).

What’s going on: “From Maine to Nevada, states are starting to help some of the 24 million Americans who lack reliable broadband pay for satellite internet, rather than focusing such aid primarily on fiber connectivity as they have in the past.”

• Providers including Amazon have launched new endeavors to increase internet access worldwide, and they could benefit from these states’ push. Amazon’s Project Kuiper, for example, launched its first operational satellites in April and expects to deploy thousands more in the coming years.

The details: “Louisiana set aside $28.7 million of the funds it expects from a federal broadband subsidy program for satellite service, and Nevada has agreed to spend $12.7 million of its funds from the same program on Project Kuiper to serve about 4,400 rural addresses.”

• The Biden administration’s $42.5 billion Broadband Equity, Access and Deployment Program favored fiber over satellite, but the Commerce Department announced earlier this year it will overhaul the program to make it “tech-neutral.”

Why didn’t they do it sooner? Some officials have been reluctant to subsidize satellite internet because it provides slower service than fiber. It’s also susceptible to more frequent outages and requires satellite updates every few years.

• But it’s also quicker and less expensive to implement. (For some remote locations, the price tag for laying fiber can go well into six figures for a single home.)

A stopgap solution: To meet needs while BEAD is rejiggered, Maine and South Carolina have started state-funded programs that subsidize satellite broadband for some rural addresses—but only from a specific provider.

• Texas has a similar program and has accepted applications from providers, and following the Commerce Department’s BEAD announcement, West Virginia is considering spending some of its funds on satellite internet, too.

China dominates the global battery mineral market, from sourcing and mining to production, according to the U.S. Energy Information Administration.

What’s going on: “China imported almost 12 million short tons of raw and processed battery minerals, accounting for 44% of interregional trade, and exported almost 11 million short tons of battery materials, packs and components, or 58% of interregional trade in 2023, according to regional UN Comtrade data.”

• These minerals’ importance will only increase as the appetite for electric vehicles and renewable energy technologies grow.
• However, as the NAM recently told the Commerce Department, Section 232 tariffs will not increase domestic sourcing of these critical minerals or decrease U.S. reliance on China for them.
• Instead, to shore up domestic critical minerals supply, the U.S. needs permitting reform, incentives for producers and enhanced trade relationships with partners other than China.

Mining and production: China either produces domestically or has large ownership stakes in companies that produce these minerals.

• In 2023, the country produced about 18% (33,000 short tons) of the world’s mined lithium, and Chinese firms “control 25% of the world’s lithium mining capacity.”
• Chinese companies also have sizable investments in mining operations in the “lithium triangle,” an area in Chile, Argentina and Bolivia that holds half of the world’s lithium stores.
• “China produced 79%, or 1.27 million short tons, of the world’s natural graphite in 2024, according to the U.S. Geological Survey.”
• Chinese firms own 80% of cobalt production in Congo-Kinshasa, the location of more than 50% of the world’s cobalt production.

Trade: After production, raw battery minerals are exported—and in 2023, China accounted for nearly half (46%) of global raw battery mineral import trade.

• That year, the world’s largest lithium producer, Australia, sent almost all its lithium exports to China.

Processing: China has the global critical minerals processing market cornered, too.

• It processes more than 90% of the world’s graphite.
• In 2022, “Chinese companies accounted for over two-thirds of the world’s cobalt and lithium processing capacity.”
• The next year, China imported 20% of global processed battery minerals, mostly African cobalt. Also in 2023, China exported 58% of the world’s processed battery minerals, primarily synthetic graphite, elsewhere in Asia and to Oceania.

Battery materials manufacture and trade: “China accounted for 53% of the world’s battery material export trade in 2023.”

• In 2022, the country made 85% of the world’s anodes, 82% of its electrolytes, 74% of its separators and 70% of its cathodes.
• In 2023, China controlled almost 85% of “battery cell production capacity by monetary value.”

If the administration wants manufacturing in the U.S. to succeed, it needs a planned strategy—one that includes extending the pro-growth provisions from the 2017 Tax Cuts and Jobs Act and gets the tax bill containing most of President Trump’s legislative agenda passed quickly. That was the message from NAM President and CEO Jay Timmons on Fox Business’ “Maria Bartiromo’s Wall Street” last week.

What’s going on: “Manufacturers were very excited that we had a new president in January who said, ‘We’re going to get this … [tax] bill done. We’re going to extend the cuts from 2017,’” Timmons told show host Maria Bartiromo on May 30 on location at the 2025 Reagan National Economic Forum in Simi Valley, California. “But now we have the uncertainty … that really requires this bill to be done as soon as possible. It’s urgent now.”

• The Senate returned this week from its Memorial Day recess with the legislative agenda as its top priority.
• The GOP hopes to extend the TCJA tax cuts permanently, while Democrats want the nonpartisan parliamentarian of the United States to determine whether an extension without an end date would violate the Senate’s Byrd rule.

Why it’s important: More than 85% of manufacturers in the U.S. say Congress must preserve the TCJA’s provisions in response to trade uncertainty, according to the NAM’s latest Manufacturers’ Outlook Survey, which Bartiromo cited.

• At risk if it doesn’t preserve the measures: some 6 million jobs and a $1 trillion economic hit.

Certainty on trade: But more is needed, Timmons said.

• The trillions of dollars in U.S. investments secured recently by the administration are definite wins—but only “as long as we have that strategy in place,” which, in addition to sound tax policy, includes regulatory certainty.
• “Trade is going to be critical,” Timmons told Bartiromo. “We need to have the certainty around whatever the rules of the game are regarding our trading practices and the work we do with our trading partners, because if we don’t have the right policies in place, and imports do end up costing us a lot of money for critical inputs for manufacturing, we can’t build those facilities.”
• For every dollar of manufactured inputs imported to the U.S., “we get $1.40 of output,” Timmons went on. “And so if we tariff everything the same, we may be in a little bit of trouble when it comes to making those investments.”

The latest resources for the NAM’s tax campaign may be found on the “Manufacturing Wins” webpage.

Washington, D.C. – The National Association of Manufacturers released its Q2 2025 Manufacturers’ Outlook Survey, revealing that optimism among manufacturers across the country has dropped sharply. Only 55.4% of respondents report a positive outlook for their companies—a nearly 15-percentage-point drop from Q1 and the lowest level since the height of the COVID-19 pandemic in Q2 of 2020.

The survey conducted earlier this month revealed that 85.4% of manufacturers believe Congress should preserve pro-growth tax policies in response to trade uncertainty.

Trade uncertainty remained the top business concern for the second consecutive quarter, cited by 77.0% of respondents, followed by increased raw material costs, which was cited by 66.1% of respondents.

“These numbers are yet another indicator that manufacturers need increased policy certainty. Congress must act urgently to preserve tax reform and empower manufacturers to make the long-term investments that drive the American economy,” said NAM President and CEO Jay Timmons. “The stakes are high: preserving tax reform will prevent the loss of 6 million jobs and avoid a $1 trillion hit to the economy—that’s why manufacturers are calling on the Senate to preserve pro-manufacturing tax policies from the House-passed reconciliation bill, while also taking steps to ensure the final package is maximally beneficial for our industry. Pro-manufacturing tax policies are a critical component of a comprehensive manufacturing strategy; this quarter’s results also show that manufacturers need a strategic approach to trade policy that allows our industry to reduce costs and access the inputs we need to make things in America.”

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.

The U.S. Supreme Court has put limits on a procedural requirement that has become a major roadblock for infrastructure and energy projects: environmental review under the National Environmental Policy Act.

The background: The predecessor of substantive statutes like the Clean Water and Clean Air Acts, NEPA is the “the single most litigated environmental statute,” NAM Vice President and Deputy General Counsel Erica Klenicki told us.

• In this case, local government and environmental groups brought a NEPA challenge to the Surface Transportation Board’s approval of an 88-mile rail line in Utah’s Uinta Basin, which would connect to the national rail network and carry crude oil to refinery markets along the Gulf Coast.
• The board approved the project after issuing a comprehensive, 3,600 page environmental impact statement under NEPA.
• But that wasn’t enough—the D.C. Circuit blocked the board’s approval, ruling that its exhaustive analysis failed to consider the repercussions of more oil production made possible by the rail line. It contended that the board should have considered the potential impact of increased oil refining on Gulf coast communities thousands of miles away—even though the board had no power at all to control for those effects.

The issue: The NAM filed an amicus brief in the case, urging the court to reject the premise adopted by the D.C. Circuit—that NEPA requires agencies to analyze the effects of upstream or downstream projects over which they do not exercise regulatory authority.

• Yesterday, the justices ruled 8–0 (Justice Neil Gorsuch recused himself) that the board did not have to consider such sweeping effects when evaluating whether to approve a project.

What they said: “NEPA is a procedural cross-check, not a substantive roadblock,” Justice Brett Kavanaugh wrote . “The goal of the law is to inform agency decision-making, not to paralyze it.”

• “Courts should review an agency’s [environmental impact statement] to check that it addresses the environmental effects of the project at hand. The EIS need not address the effects of separate projects,” Kavanaugh wrote. “In conducting that review, courts should afford substantial deference to the agency as to the scope and contents of the EIS.”

The NAM’s advocacy: The NAM has been a tireless proponent of limiting regulatory overreach, especially the out-of-control permitting process that strangles important new infrastructure and energy projects.

• “The congressional intent behind NEPA when it was passed was to make sure a specific project could be reviewed for its environmental impact—not to slow down progress on important economic growth,” said NAM Director of Energy and Resources Policy Michael Davin. “The U.S. should learn from other nations and review projects for environmental impacts without taking years and years to approve them.”