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“Manufacturing in the U.S. has momentum”—and to keep it going, manufacturers will need to push, NAM President and CEO Jay Timmons said Tuesday in the NAM’s annual State of Manufacturing Address.
 
What’s going on: Speaking to an audience of manufacturers and congressional and state officials at Armstrong World Industries in Hilliard, Ohio, Timmons, who was joined by NAM Board Chair and Johnson & Johnson Executive Vice President and Chief Technical Operations & Risk Officer Kathy Wengel, emphasized the “defining moment” for the industry and said that for manufacturing, “what happens next really matters.”

• “Uncertainty is the enemy of investment,” he told the crowd. “Manufacturing is a capital-intensive industry. We make decisions months and years in advance. … That’s why we need certainty. We need a clear, actionable, multistep strategy from our government—one that says, ‘We want you to invest here, hire here and succeed here.’”
• Timmons’ annual speech kicked off the NAM’s 2025 Competing to Win Tour, starting with a whirlwind four-states-in-four-days tour of manufacturing facilities, schools, government offices and more.
• “In Ohio, manufacturers have thrived because our leaders have taken decisive actions to keep our industry competitive,” Ohio Manufacturers’ Association President Ryan Augsburger said at the kickoff event. But now, “manufacturers across Ohio and the nation are facing critical challenges, from tax uncertainty, project delays and workforce shortages to supply chain vulnerabilities and price pressures that threaten our ability to grow. … These issues cannot wait.”

What manufacturing needs: Certainty from the federal government should come in several forms, Timmons said, including the following:

• Preserving tax reform: The 2017 tax reforms were “rocket fuel” for manufacturing in America—but key provisions have expired and others are scheduled to sunset. Congress must bring them back and improve and extend the package. “Every day that Congress delays because of process and politics, manufacturers face rising uncertainty, delayed investments and fewer jobs,” said Timmons.
• Regulatory clarity and consistency: Manufacturers today spend a total of $350 billion just to comply with regulations. “Commonsense regulation is critical to American manufacturers to continue to innovate, to compete against foreign manufacturers and to improve the lives of American citizens,” Austin So, general counsel, head of government relations and chief sustainability officer for Armstrong World Industries, told the crowd.
• Permitting reform: President Trump’s lifting of the liquefied natural gas export permit ban was a start, but to reach our full potential as energy leader, we must require “federal agencies to make faster decisions and reduc[e] baseless litigation,” said Timmons.
• Energy dominance: “America should be the undisputed leader in energy production and innovation. But … we are seeing opportunities for energy dominance fade in the face of a permitting process that takes 80% longer than other major, developed nations,” Timmons said, adding that we must cut red tape, require federal agencies to make faster decisions and reduce meritless litigation.   
• Workforce strategy: By 2033, manufacturing faces a shortfall of 1.9 million manufacturing employees, Timmons said. To fill those positions, the sector needs a “real workforce strategy,” one that includes apprenticeships, training programs and public–private partnerships.
• Commonsense trade policy: If President Trump continues to use tariffs, “we need a commonsense policy … that provides manufacturers with the certainty to invest” and “a clear runway to adjust,” according to Timmons.

State of manufacturing: “Manufacturing in the United States is moving forward,” Timmons said. “Like a press at full speed, like a production line firing on all cylinders, like the workers who show up before dawn and leave long after the job is done—manufacturing in the United States is driving us forward.” And Timmons added that now it’s time “to make America Great for Manufacturing Again.”

On the move: Following the speech, Timmons, Wengel and Augsburger joined state lawmakers, including state Sens. Kristina Roegner and Andrew Brenner, and local business leaders for a visit to the Ohio Statehouse for an event focused on the importance of tax reform for Ohio and its manufacturing sector.

• A recent NAM study found that, if key provisions of tax reform are allowed to expire, Ohio would risk losing 208,000 jobs and $18.9 billion in wages.

What’s at stake: Tax reform was transformational for Humtown Products, the Columbiana, Ohio–based family-owned sand cores and molds manufacturer, President and CEO Mark Lamoncha told the audience at the Ohio Statehouse tax event.

• “We have been at the forefront of 3D-printed manufacturing for years and have invested significantly in the machinery and equipment required, including the purchase of 3D printers—one of which can easily cost over $1 million,” he said.
• “Since the 2017 tax reform, Humtown has invested over $9 million in capital expenditures related to 3D printing and averages around $100,000 annually in R&D costs. Under the 2017 tax reform, we were able to deduct 100% of those costs, generating around $1.6 million in accelerated tax savings.”
• “That amount alone allowed us to purchase another 3D printer, fueling continued growth. That’s what tax certainty allowed us to do. But right now, that certainty is slipping away. As these provisions begin to expire, our tax burden is increasing.”

Creators Wanted: The group also fit in a stop at Columbus State Community College, which serves approximately 41,000 students, to visit with students in the semiconductor and mechanical drive classes.
 
The last word: The NAM recently “stood shoulder-to-shoulder with congressional leaders—delivering a clear, urgent message on tax reform” and is “driving the agenda on regulatory certainty, on energy dominance, on permitting reform, health care and workforce development,” Wengel told the audience. “The NAM is not waiting for Washington to act; we are making sure Washington acts for you, for manufacturers.”

• Added NAM Executive Vice President Erin Streeter: “The NAM is on [these issues], and we’re going to keep fighting, as we do every day with the right leaders, the right strategies and the right vision for the future.”

If you’re finished with that soda, Constellium hopes you’ll throw the can in the nearest recycling bin.

Use and reuse: Used cans are the mainstay of the global aluminum manufacturer and recycling giant, which owns and operates one of the world’s largest used beverage can (UBC) plants, in Muscle Shoals, Alabama. There the company recycles the equivalent of more than 20 billion cans every year.

• “We shred the cans, remove the inks and coatings and then remelt that into aluminum we can use,” said Constellium Vice President of Strategy and Business Planning for Packaging and Automotive Rolled Products Raphael Thevenin. “It’s a very circular way of using the material. Within 60 days, it’s back on the shelf” as new cans.
• Using UBCs to make new cans consumes 95% less energy than using new aluminum and is a key piece of the entire aluminum production supply chain.

Many uses: Aluminum can be recycled almost infinitely, a characteristic that gives the metal a wide variety of applications in manufacturing, as does its light weight and durability.

• In addition to canstock, Constellium’s aluminum products include auto rolled and structural products used for vehicle hoods, doors, battery enclosures and bumpers, as well as aerospace solutions, armored products for the defense industry and much more.

Why cans? UBCs are “so widely available in the U.S., and we have such a strong network of traders that we’re able to recycle them in large volumes,” Thevenin continued, adding that 10 American states give cash deposits on beverage containers. (This means that consumers can redeem their empties for cash, currently an average of 5 cents a pounds for aluminum cans.)

• However, while the U.S. consumer recycling rate for UBCs is generally higher in states with deposits, it’s on the decline nationwide, having fallen to 43% in 2023 from 45% in 2020.
• “We’re seeing a million tons of aluminum landfilled in the U.S. every year,” according to Thevenin.

What they’re doing: The increasing number of UBCs consigned to the trash means “the availability of scrap metal is declining,” Thevenin continued.

• In an effort to reverse the trend, Constellium is assessing the possibility of pushing for greater collection efforts in areas where UBC recycling is low, urging states with deposits to offer more money for exchanges and advocating the construction of more UBC-recycling infrastructure throughout the U.S.

Why it’s important: For the sake of both cost and sustainability, the U.S. must increase its stock of available aluminum scrap, Thevenin said.

• “Because we don’t have the [widespread] infrastructure in place, a lot of scrap is exported outside the U.S.,” he told us. “But if we want to make sure the products we put on the market are sustainable and profitable, we have to use as much recycled material as possible.”
• Europe recycles about 75% of its UBCs and is set to recycle about 90% by the end of the decade, according to Thevenin. “There’s a huge need to reduce the gap between the U.S. and Europe.”
• To that end, Constellium has undertaken a campaign to educate lawmakers on the need to build out U.S. infrastructure. “We need to make sure legislators are aware,” said Thevenin. “They need to understand the importance of keeping more scrap metal at home.”

Recycling cars: In Europe and North America, Constellium is actively investigating new ways to recycle aluminum from old cars efficiently, either through sorting or dismantling.

• “It’s about a 10-to-15-year cycle for car recycling, meaning that the metal comes back in the form of a new car all those years after” the initial recycling, Thevenin said. “Today the most economical way to get scrap from a car is to shred it, so you get a mix of materials and have to sort plastics, glass, metals, then nonferrous metals and steel. We’re working on developing new alloys that are more scrap tolerant and testing them on the market.”
• Constellium is also collaborating with manufacturers on creating a laser/X-ray machine that will be able to sort the different alloys in recycled cars, easing and speeding the recycling process.
• In the longer term, the company hopes to work with automotive makers to standardize the alloys used in vehicles because “when it’s mixed, it’s more difficult to sort.”

The bottom line: Aluminum recycling is a no-brainer because it’s a win for consumers, manufacturers, retailers and the environment, Thevenin went on.

• For example, once a UBC collection plant “is operational, it’s self-sustaining because [the operator] can sell to companies, such as Constellium, and then invest that revenue on more and better infrastructure.”
• When it comes to vehicles, “when car makers develop a new model, they should make sure it’s easy to recycle” because doing so will mean both cost savings and “being able to offer consumers lower-carbon products.”

The introduction of artificial intelligence has been a boon to manufacturing, and the technology will continue to have a positive impact—as long as regulations are “right-sized,” manufacturers told Congress this week.

What’s going on: “Manufacturers are utilizing AI in myriad ways on the shop floor and throughout their operations,” the NAM told the House Subcommittee on Commerce, Manufacturing and Trade in a statement for the record at Wednesday’s hearing, where data was cited.

• “The diverse use-cases of AI in manufacturing suggest a need for a cautious regulatory approach to this groundbreaking technology: one that supports innovation and U.S. leadership in AI while providing context-specific, risk-based, right-sized rules of the road for manufacturers,” the NAM said.
• Giving testimony at the hearing, Siemens USA President and CEO and NAM Board Member Barbara Humpton discussed the many benefits of using AI in manufacturing and emphasized the need to ensure that AI regulations include “targeted” rather than “overly broad” definitions.

Industrial vs. consumer-focused AI: First, it’s important to distinguish between industrial and consumer-facing AI, Humpton told the subcommittee members.

• “Industrial AI is different from consumer AI,” she said. “Industrial AI uses controlled data from the manufacturing environment to help manufacturers create business value. Think better products, more efficient operations, a more prepared workforce. … AI will enable all companies—from startups to small and medium enterprises to industrial giants—to thrive in this new era of American manufacturing.”
• In written testimony, she added that “the core distinction of industrial AI is that it is trained on highly monitored data from sensors and machines, providing a more reliable foundation for training AI models.”

Simple, singular and targeted: Regulation of AI should be undertaken with a light touch and following a full accounting of on-the-books laws to prevent duplicative and/or contradictory rules, the NAM said.

• “[P]olicymakers should always review existing laws and regulations before enacting new ones, because most uses of AI correspond to tasks and objectives that industry has faced for a long time and that are thus highly likely to have already been addressed by existing laws and regulations,” said the NAM, which also referenced its first-of-its-kind AI report, “Working Smarter: How Manufacturers Are Using Artificial Intelligence,” released last May.
• “Similarly, policymakers must right-size any compliance burden associated with AI regulation,” the NAM continued. “The ubiquitous use of AI throughout modern manufacturing, as well as manufacturing’s dependence on innovation, underscore the need for rules that enable rather than hinder manufacturers’ development and adoption of AI systems.”

Protect without hindering: Congress “must advance industrial AI by prioritizing strong rules for digital trade, especially to include strong protections for source code and algorithms,” Humpton went on in her written testimony. “We encourage policymakers to build upon the success of previous U.S.-led efforts to protect intellectual property.”

• Legislators must also safeguard privacy and protect against baseless legal claims, the NAM said. “[I]t is … crucial that Congress take steps to maintain the privacy of personal data when utilized in AI contexts. … A federal standard should avoid a patchwork of state-level rules by fully preempting state privacy laws; it also should protect manufacturers from frivolous litigation.”

The last word: “The range and importance of uses of AI—transforming every aspect of the core of manufacturers’ operations—make it clear that AI has become integral to manufacturing,” said the NAM. “With the right federal policies, manufacturers in the U.S. will continue to devise new and exciting ways to leverage AI to lead and innovate and stay ahead of their global competitors.”

To lift much of the burden on manufacturers in the U.S., Congress must reinstate pro-growth tax measures, enact commonsense regulatory reforms and undertake comprehensive permitting reform. That was the main message of Click Bond CEO and NAM Small and Medium Manufacturers Group Chair Karl Hutter to legislators yesterday on Capitol Hill.
 
What’s going on: “American businesses now shoulder a staggering $3 trillion annually in regulatory costs—disproportionately impacting manufacturers,” Hutter told the House Committee on Small Business at Wednesday’s hearing.

• “Unfortunately, small companies get hit twice—with unworkable regulations that apply to them [and again with] compliance and reporting requirements that larger firms are forced to pass down. Fortunately, Congress and the Trump administration have the opportunity to reverse course.”   

Rocket fuel for manufacturing: The 2017 Tax Cuts and Jobs Act “was rocket fuel for Click Bond,” said Hutter—whose Carson City, Nevada–based family business makes adhesive-bonded fasteners used by the U.S. military, commercial aviation industry and NASA.

• “The new 21% corporate tax rate allowed us to raise wages for production employees, invest in capital equipment, strengthen our employee tuition support program and accelerate the timeline for constructing a new facility. The new 20% pass-through deduction likewise empowered our suppliers and partners to reinvest in their businesses, readying them to support our growth.”  

Changes for the worse: But growth was halted in 2022 and 2023, when provisions from the TCJA began to expire. Worse still: More pro-growth tax measures are due to expire at the end of this year—unless Congress intervenes.

• “It is now more expensive for Click Bond to conduct R&D, the lifeblood of both our product and process innovation,” according to Hutter. “It’s more expensive for us to purchase capital equipment, the tools that will unleash the productivity of our team. And it’s more expensive for us to finance job-creating investments such as that state-of-the-art, sustainable manufacturing facility.”  

Ill effects: According to a recent study released by the NAM, nearly 6 million American jobs and more than $1 trillion of U.S. GDP will be at risk if Congress fails to act by the end of this year to preserve TCJA’s pro-manufacturing provisions.
 
What should be done: Manufacturers everywhere are struggling under the weight of both these provisions’ expiration and needless, out-of-date government requirements, Hutter went on. To fix these problems, he said, Congress should:

• Unwind “outdated chemicals reporting requirements that force us to look backward in time and deep into our supply chain”;
• Stop unnecessary permitting roadblocks by the Environmental Protection Agency at the state and local levels;
• Roll back expensive energy and labor mandates;
• Undertake “comprehensive permitting reform”; and
• Make permanent the pro-manufacturing tax provisions scheduled to sunset at the end of 2025 and bring back already expired provisions that boosted the sector and the U.S. economy as a whole.

The final say: “Congress has a critical opportunity to right-size the regulatory landscape, put an end to permitting delays and protect manufacturers from devastating tax increases,” Hutter concluded. “I encourage you to seize [it] … because when manufacturing wins, America wins.”
 

For a stronger, more competitive America, Congress must make permanent the pro-growth tax provisions from President Trump’s 2017 Tax Cuts and Jobs Act, NAM President and CEO Jay Timmons and House Ways and Means Committee Chairman Jason Smith (R-MO) wrote in a recent op-ed for the Washington Examiner.

What’s going on: “The choice is clear. Congress must deliver the results the American people voted for on Election Day by extending and expanding Trump’s pro-growth tax policies, which have worked so well.”

• The reforms allowed manufacturers “to hire, expand and invest in their communities” at historic rates, with a particularly positive effect on small and medium-sized businesses.
• Georgia-based Winton Machine Company, which produces machinery used in tubular parts and coaxial cable fabrication, would not have been able to expand its workforce, raise employee pay or purchase critical technology had it not been for the TCJA, as Winton CEO and Co-Owner and NAM board member Lisa Winton told Congress in 2023.
• Austin Ramirez, president and CEO of hydraulic and electromechanical control systems maker Husco in Wisconsin and NAM Executive Committee member, told legislators that tax reform allowed his family-owned company “to create jobs, expand research and development, compete globally and invest in its future, including the most significant renovation of his business in 70 years,” Timmons and Chairman Smith wrote.

What’s at stake: “Key provisions of the 2017 Trump tax reforms have already expired, and many more are set to lapse later this year,” Timmons and Chairman Smith continued.

• “Without swift action, manufacturers will miss out on tax incentives for research and development and equipment purchases, while small businesses and family-owned manufacturers will see their tax rate double to as high as 43.4%—all at a time when global competition is intensifying.”

According to a recent NAM study cited in the op-ed, if Congress fails to preserve tax reform by the end of this year:

• Nearly 6 million U.S. jobs—more than 1 million of them in manufacturing—will be lost; and
• America will lose some $1.1 trillion in GDP and $540 billion in wages.

What must be done: Congress must act now to restore the pro-manufacturing tax provisions that have already sunset and make permanent those that are scheduled to expire, Timmons and Chairman Smith concluded.

• “With Trump leading the charge, it is time for Congress to deliver, protect these reforms and set American workers up for success in 2025 and beyond. Together, we can ensure the next chapter in America’s story is one of growth, opportunity and strength.”

Former Transportation Security Administration Assistant Administrator for Strategic Communications and Public Affairs Alexa Lopez has joined the NAM’s communications team.
 
What’s going on: Lopez, a native of Dayton, Ohio, is the NAM’s vice president of communications and public affairs, a newly created position.

• “Alexa knows how to navigate complex challenges, craft compelling narratives and drive real impact,” NAM President and CEO Jay Timmons said. “She has built a career on delivering results, and manufacturers will benefit from her ability to elevate our industry’s voice at a time when manufacturers’ influence on the future has never been more important.”
• Lopez holds a Master of Public Affairs and a Master of Arts in Arts Administration from the Indiana University O’Neill School of Public and Environmental Affairs.

Proven track record: At the TSA, Lopez led all media operations, strategic communications, marketing and branding and multimedia efforts and served as adviser to the TSA administrator. She was at the agency for four years.

• Prior to that, Lopez worked in public affairs at the Federal Emergency Management Agency, the American Society of Civil Engineers, Ogilvy Public Relations and the City of Bloomington, Indiana.

On Feb. 1, President Donald Trump imposed 25% tariffs on products from Canada with lower 10% on energy products, 25% tariffs on products from Mexico and an additional 10% on products from the People’s Republic of China.

NAM Vice President of International Policy Andrea Durkin and her team break down the actions for manufacturers:

Executive orders impose tariffs on Canada, China and Mexico: On Feb. 1, President Trump, through three separate executive orders, declared a national emergency and invoked the International Emergency Economic Powers Act to apply ad valorem tariffs on products from Canada, Mexico and China, citing the sustained influx of illicit opioids and other drugs.

• Canada Executive Order:“Imposing Duties to Address the Flow of Illicit Drugs Across Our Northern Border”
• China Executive Order: “Imposing Duties to Address the Synthetic Opioid Supply Chain in the People’s Republic of China”
• Mexico Executive Order: “Imposing Duties to Address the Situation at the Southern Border”

How tariffs will apply:

• For products from Canada:
• A 25% tariff will be applied in addition to any already applicable duties, fees or charges.
• A 10% tariff will be applied to “energy or energy resources” defined as crude oil, natural gas, lease condensates, natural gas liquids, refined petroleum products, uranium, coal, biofuels, geothermal heat, hydropower and critical minerals.
• For products from China:
  • A 10% tariff will be applied in addition to any already applicable duties, fees or charges.
  • For products from Mexico:
  • A 25% tariff will be applied in addition to any already applicable duties, fees or charges.
• No duty drawback:No drawback shall be available with respect to the duties imposed pursuant to these orders.
• De minimis: Duty-free de minimis treatment will be suspended.

Timing of the tariffs:

• Tariffs will apply from Feb. 4, 2025.
• Tariffs will not apply to goods loaded onto a vessel or in transit before 12:01 a.m. Feb. 1 with certification to U.S. Customs.

Duration of tariffs: The tariffs will remain in place until the president determines that the governments of Canada, Mexico and/or China have taken “sufficient action to alleviate the crisis,” including through cooperative enforcement actions.

A retaliation clause: The president may increase or expand in scope the tariffs imposed under these executive orders if the governments of Canada, Mexico and/or China impose retaliatory tariffs.

Reports to Congress: The Secretary of Homeland Security, in coordination with the Secretary of the Treasury and other agencies, will submit recurring and final reports to Congress on the state of the national emergency under these orders.

What’s next: The NAM issued a statement in response, and the NAM trade team is analyzing the impact on manufacturers and will continue to engage policymakers on these sweeping trade actions.

How USMCA Boosted North American Supply Chains

Existing home sales increased 2.2% in December and jumped 9.3% from December 2023, the largest annual gain since June 2021. Housing inventory declined to 1.15 million units, reflecting a 13.5% decrease from November but up 16.2% from last year. The median existing home price was $404,400, up 6.0% from last year, with all four U.S. regions reporting price increases.

Single-family home sales rose 1.9% in December, with the median price increasing 6.1% from December 2023 to $409,300. Condo and co-op sales grew 5.1% in December and 2.5% from the previous year, with the median price up 4.5% from the prior year to $359,000.

Homes were typically on the market for 35 days in December, up from 32 days in November and 29 days in December 2023. First-time buyers made up 31% of sales in December, up slightly from 30% in November and 29% in the same month last year. All-cash sales accounted for 28% of transactions in December, up from 25% in November but down from 29% in December 2023. Meanwhile, investors or second-home buyers represented 16% of homes purchased in December, up from 13% in November and the same as December 2023. Distressed sales, including foreclosures and short sales, represented 2% of purchases in December, unchanged from the past two months and from the previous year.

The S&P Global Flash U.S. Manufacturing PMI rose slightly from 49.4 in December to 50.1 in January, signaling nominal growth in manufacturing after six months of contraction. Both factory production and new orders increased for the first time in six months. Employment also rose for the third month in a row, and the rate of job creation is the highest since July. Supplier delivery times lengthened, indicating busier supply chains, but this was offset by the greatest drop in inventories in 17 months.

The improvement in sentiment was notable in the manufacturing sector, soaring to the highest reading since May 2022, adding to suggestions that activity may improve further in the coming months. Respondents cited a more business-friendly new administration in terms of looser regulation and lower taxes as beneficial to the outlook. On the other hand, others cited concern over tariffs, a strong dollar and higher prices.

Manufacturing activity contracted modestly in the Tenth District in January, while expectations for future activity remained positive but slipped from 17 to 15 from December. The Tenth Federal Reserve District encompasses the western third of Missouri; all of Kansas, Colorado, Nebraska, Oklahoma and Wyoming; and the northern half of New Mexico. The month-over-month decrease in activity was due to modest declines in both durable and nondurable manufacturing. Most month-over-month indexes were negative, apart from employment, prices and finished goods inventories.

Production fell three points to -9, while new orders improved from -16 to -6. Employment remained roughly the same in January. The backlog of orders remained negative but ticked up to -19 from -22. The year-over-year composite index for factory activity increased from -16 to -9 but stayed negative. Like in December, capital expenditures, prices received and prices for raw materials all increased year-over-year in January while other indexes declined.

This month, survey respondents were asked about their firms’ exports and imports. More than half of firms (55%) sell 1% to 25% of their products or services outside of the U.S., while more than two-thirds (67%) source 1% to 25% of their inputs from outside of the U.S. On the other hand, more than one-third (36%) of firms do not sell their products or services internationally, and only 16% of firms source none of their imports from outside of the U.S. Additionally, a majority of firms do not expect their sourcing decisions to change in the next year (57%) or next three years (53%). Almost a quarter of firms (23%) anticipate slight reductions in internationally sourced inputs in the next three years. Over the next year, 16% of firms forecast increases in sourcing outside of the U.S., while 18% expect increases in the next three years.