The Cost of Regulations
Federal regulations cost the U.S. economy more than $3 trillion a year, and manufacturers - especially small manufacturers - shoulder a disproportionate share. The NAM is pressing for a smarter, more accountable regulatory system so manufacturers can invest, hire and grow.
Excessive regulation is a hidden tax on every manufacturer.
Federal regulations drain more than $3 trillion from the U.S. economy every year — and manufacturers shoulder a disproportionate share. For small manufacturers, the per-employee burden is the heaviest of all, pulling resources away from wages, equipment and growth.
If we are to succeed in creating a more competitive economy, we must reform our regulatory system so that manufacturers are not exhausting time and resources to comply with inefficient, duplicative and unnecessarily burdensome regulations. The NAM’s study, The Cost of Federal Regulation to the U.S. Economy, Manufacturing and Small Business, provides a top-line estimate of regulatory costs and a snapshot of how the burden is distributed across sectors and firm sizes.
The total annual cost of federal regulations on the U.S. economy — a burden manufacturers feel more than most.
What regulation really costs manufacturers
Source: W. Mark Crain and Nicole V. Crain, <em>The Cost of Federal Regulations to the U.S. Economy, Manufacturing and Small Business</em>, commissioned by the National Association of Manufacturers (2023).
of what manufacturers now spend on compliance would go to reinvesting in their business or their employees if they had the choice, according to the NAM’s 2023 Crain study.
What Should We Do Now?
Policy recommendations Congress and the administration should act on to protect the environment and ensure public health and safety while promoting economic growth and job creation.
A Smarter Regulatory System
Strengthen, streamline and codify the regulatory system to improve regulatory outcomes, increase accountability through meaningful retrospective reviews and sunset outdated and ineffective regulations.
1Accountable Agencies
Set and enforce responsible regulatory budgets, conduct rigorous oversight and hold independent regulatory agencies accountable for discretionary regulations, improved transparency and the quality of the rules they issue.
2An End to Frivolous Lawsuits
Reinstate mandatory penalties for lawyers who file frivolous lawsuits and prevent abuses of the class action and mass torts systems, as well as the public nuisance doctrine.
3Efficient Litigation
Promote the efficient, cost-effective resolution of litigation, including through alternative dispute resolution.
4Clear Liability Standards
Support clear standards for liability and the rigorous application of procedural rules, including statutes of limitations and relevance and proportionality requirements in discovery, as well as limits on punitive damages and case consolidation.
5A Sound Merger Review Process
Resist calls for punitive changes to the review process for mergers, acquisitions and significant capital investments that could undercut the consumer welfare standard and harm America’s economic competitiveness.
6Predictable Federal Preemption
Maintain and support legislation that guarantees unified and predictable federal preemption for federally approved and regulated products and services in national commerce and limits state law tort lawsuits that unacceptably interfere with federal regulatory regimes.
7No Subsidized Litigation
Oppose legislation that incentivizes and subsidizes litigation against manufacturers.
8Fair Arbitration
Oppose efforts to prohibit binding arbitration clauses in employment, consumer and commercial contracts when arbitration programs meet a high standard for due process and protect the rights of all parties involved.
9A Crackdown on Counterfeits
Support legislation that reduces the availability of counterfeits on e-commerce platforms, acts against IP infringement, provides up-to-date enforcement capability and improves government collaboration against fake goods.
10Share Your Voice
By sharing our voices, manufacturers play a vital role in advocating for commonsense regulatory reforms that promote economic growth and job creation. Tell us why sensible regulation is critical to your company’s competitiveness — you are helping equip the NAM with our most powerful advocacy tool: the manufacturing voice.
Manufacturers for Sensible Regulations
The National Association of Manufacturers, members of the NAM’s Council of Manufacturing Associations and the Conference of State Manufacturers Associations launched Manufacturers for Sensible Regulations to address the cumulative impact of federal rulemaking on manufacturers. The coalition has pressed successive administrations to coordinate regulatory policy at the senior level and to hold agencies to a standard of clear, cost-conscious and accountable rulemaking — most recently in manufacturers’ December 2024 letter to the incoming administration.
For more information, contact [email protected].
Notable members
Go Deeper
Regulatory reform runs through every issue manufacturers care about. Explore the related NAM agendas.
Manufacturers Feed America
How food and beverage manufacturers are pressing for a uniform national standard and science-based food regulation.
Explore →Legal Reform
Climate torts, junk science, third-party litigation funding and class action abuse — the NAM’s tort-reform agenda.
Explore →Permitting Reform
America on Hold: why faster, more predictable permitting is the fastest way to unlock manufacturing investment.
Explore →NAM Legal Center
Where manufacturers take regulatory overreach to court — litigation, amicus briefs and the case search.
Explore →Regulation Action List
Flag a rule that is holding your company back. Member submissions feed the NAM’s regulatory action list.
Submit a regulation →Take Action for Sensible Regulation
Outdated and excessive regulations cost manufacturers billions and hold back growth. Use the NAM’s Advocacy Toolkit to tell Congress it’s time for smarter, accountable rulemaking.
