Trade

With a level playing field and an accessible market, manufacturers in America can out-perform any competitor. That’s why we need smart trade deals that expand opportunities to sell our products around the world and ensure global trade is open, fair and free.

Policy and Legal

What a Yield Curve Inversion Means for the Economy

Last Wednesday, as yields on shorter-term bonds surpassed those of longer-term bonds, the U.S. economy briefly experienced an “inverted yield curve”. Historically, such an inversion has been a reliable predictor of recessions to come.

Chad Moutray, chief economist for the National Association of Manufacturers, explains the significance of the yield curve and whether manufacturers should worry that a recession is on the way.

What is a yield curve?

In its simplest terms, if I lend money to you over several years, I would expect to get receive a higher interest rate to compensate me for giving up access to my money for a longer time frame. In a healthy economy, interest rates should be upward-sloping as the length of maturities increases. 

What does it mean if a yield curve inverts?

An inverted yield curve means that the interest rate for short-term loans is higher than for longer maturities. This would imply that financial markets might be more pessimistic in its outlook.

An inverted yield curve can foreshadow a recession. The spread between 10-year and 2-year Treasury bonds is often seen as an important barometer. Since World War II, when this yield curve has inverted, the U.S. economy has entered a recession within the following 12 to 18 months.

The yield curve between 10-year and 2-year Treasury yields inverted last week. It’s positive now, but still close to inversion. The last time this spread inverted was June 2007, predating the start of the Great Recession by five months. 

Should manufacturers be worried? Does that mean that a recession is just around the corner?

There are warning signs that we are closely following. Broadly, the global economy is clearly slowing, as noted in our most recent monthly report, and financial markets have been highly volatile in recent weeks, exacerbated by trade uncertainties. As a result, businesses in the U.S. have become more hesitant in their spending and there are worries that the economic slowdown abroad could find its way to the U.S. Within the manufacturing industry, production is contracting both in the U.S. and abroad, and hiring has slowed in the sector.

However, a yield curve inversion does not necessarily mean that a recession is imminent. Yields may be influenced by other factors, and there are positive economic signs too. Consumer spending remains strong, and the labor market remains near 50-year lows. The U.S. economy should also grow 2.3 percent in 2019.

What can policymakers do to avoid an economic downturn?

Central banks around the world are easing monetary policies to stimulate growth, or to provide an “insurance policy” for the economy so economic recovery can be sustained. These trends have pushed 10-year Treasury yields to their lowest levels since October 2016.

Manufacturers remain optimistic about the future, but in order to keep growing, we need to address the workforce crisis and resolve trade uncertainties. Namely, passing the USMCA, reauthorizing the Ex-Im Bank and securing a bilateral trade agreement with China are necessary to ensure manufacturers in the U.S. can continue to grow.

Press Releases

NAM Statement on China Tariffs

“It’s Time for an Agreement to Be Reached”

Washington, D.C. – National Association of Manufacturers President and CEO Jay Timmons released the following statement on the newly-announced 10 percent tariffs on $300 billion worth of Chinese goods:

“Manufacturers acknowledge that China cheats, and we were the first to call for a rules-based, enforceable trade agreement with China to end their unfair and harmful trade practices. The administration’s latest tariff action will certainly get their attention, but it also has the attention of manufacturing workers in the U.S. and their families, who are feeling the negative impact of the current tariffs and will be made even less competitive with this new tax on trade. We trust the administration has considered all of these short-term economic down-sides as they reach for long-term improvement.

“Manufacturing optimism took a substantial hit in our latest survey, driven largely by uncertainties in trade policy. If the U.S. economy slows, the world economy will follow quickly, and China’s people will suffer mightily as well. China should be willing to conclude an enforceable, bilateral trade agreement that ends the uncertainty and levels the playing field for all manufacturers.

“The world is simply not willing to let China continue to distort markets, steal intellectual property and force transfers of technology and data, among other damaging practices. It’s time for an agreement to be reached.”

-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 more than 12.8 million men and women, contributes $2.38 trillion to the U.S. economy annually, has the largest economic multiplier of any major sector and accounts for more than three-quarters 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 Manufacturers or to follow us on Shopfloor, Twitter and Facebook, please visit www.nam.org.

733 10th St. NW, Suite 700 • Washington, DC 20001 • (202) 637-3000

Press Releases

Manufacturers Welcome Senate Bill to Reauthorize Ex-Im Bank

“We Need Long-Term Certainty”

Washington, D.C. – National Association of Manufacturers Vice President of International Economic Affairs Linda Dempsey released the following statement praising introduction of legislation authored by Sens. Kevin Cramer (R-ND) and Kyrsten Sinema (D-AZ) to reauthorize the Export-Import Bank:

“We need long-term certainty that the Ex-Im Bank will be able to continue helping manufacturers of all types and sizes secure new sales overseas that support well-paying American jobs. This bipartisan legislation—through its 10-year reauthorization of the agency and fixes to its past quorum issues—will help do just that and marks an important step forward toward reauthorization. Manufacturers appreciate the work of members on both sides of the aisle to move forward a robust Ex-Im reauthorization and urge both chambers of Congress to work together to reauthorize the agency before the September 30 deadline. The more than 12.8 million men and women who make things in America are depending on it.”

Quick facts about the Ex-Im Bank:

  • The agency has supported 1.7 million jobs over the past 10 years.
  • On average, more than 90 percent of the Ex-Im Bank’s transactions directly support small businesses.
  • The agency has generated $9.6 billion for taxpayers since 1992.
  • Foreign competitors are stealing America’s competitive advantage by devoting hundreds of billions of dollars to official export credit agency financing for domestic manufacturers.
  • The agency’s default rate is better than many commercial lenders and far below the 2 percent maximum rate set by Congress.

-NAM-

Policy and Legal

Manufacturers Show Up to Push for Swift USMCA Passage

During the NAM’s “Trade Makes America” Capitol Hill fly-in, more than 130 manufacturing representatives and USMCA stakeholders engaged with officials.

USMCA fly-in participants arrive at Capitol

Manufacturers from all over the nation came to Washington, D.C., this week to express the urgent need for United States-Mexico-Canada Agreement (USMCA) passage at a series of events with key legislative decision-makers. 

On Monday, a delegation of manufacturing leaders met with Vice President Mike Pence to highlight the importance of the USMCA to the U.S. manufacturing industryExecutives present included National Association of Manufacturers former Board Chair and Emerson CEO David Farr, Winton Machine Company CEO Lisa Winton, Kent Corporation CEO Gage Kent, General Motors CEO Mary Barra, Sukup Manufacturing Co. President Charles Sukup and HM Manufacturing President Nicole Wolter. 

“The Trump administration continues to show its steadfast commitment to America’s manufacturing workers,” said Farr. “Manufacturers in Missouri and across the nation are keeping our promise to grow, invest and hire. This historic agreement will help us sustain this momentum. Congress must act now and ratify this agreement.” 

On Wednesday, during the NAM’s “Trade Makes America” Capitol Hill fly-in, more than 130 manufacturing representatives and USMCA stakeholders engaged in more than 130 meetings with offices throughout the House of Representatives and the Senate to make the case for passage of the agreement as soon as possible. Beginning on last Wednesday’s USMCA “day of action,” thousands of manufacturers have contacted Congress by phone and mail to advocate for USMCA passage.  

There is increasing recognition from both sides of the aisle about the need to modernizNorth American trade rules,” said NAM vice president of international economic affairs policy Linda Dempsey. “As Congress considers the USMCA, it is vital that they hear from the men and women who make things in Americasince they will be directly affected by their decision.” 

Canada and Mexico purchase more U.S.-manufactured goods than our next 11 trading partners combined despite representing less than 4 percent of the global economyMoreover, exports to Canada and Mexico support 2 million American manufacturing jobs and 40,000 small and medium-sized businesses. Comprehensive new NAM data shows the USMCA’s positive impacts in every state. 

Already ratified by Mexico, the USMCA is designed to modernize and bolster free trade between North American nations, aiding workers, farmers, ranchers and businesses in each country. If ratified, the agreement will expand U.S. exports, improve intellectual property protections and enforcement and level the playing field for U.S. workers in every state.  

Manufacturers have been steadfast in urging quick congressional passage of the USMCA to ensure their businesses across the country can continue to grow, compete globally and support millions of well-paying jobs.  

Press Releases

Michigan Manufacturers Gather in Washington to Urge USMCA Passage

The National Association of Manufacturers Is Committed to Helping Manufacturers and Manufacturing Employees in Michigan by Supporting USMCA Passage

Washington, D.C. – On Wednesday, July 17, the National Association of Manufacturers will bring manufacturing leaders from Michigan and across the country together in Washington to urge Congress to pass the new U.S.–Mexico–Canada Agreement. Manufacturers will meet with their respective members of Congress to let them know why the USMCA is pivotal to their businesses and the 2 million men and women across the nation, including more than 117,000 in Michigan, whose manufacturing jobs depend on exports to Mexico and Canada.

The USMCA is critical to the Michigan economy, and swift passage will help restore certainty for manufacturers across the country, allowing them to grow and compete with the rest of the world, said NAM President and CEO Jay Timmons. Without this agreement, Michigan’s manufactured goods exports could be subject to $5.2 billion in extra taxes, threatening manufacturing jobs across the state and hurting consumers and families.

The USMCA, which has been ratified by Mexico, modernizes and bolsters free trade between North American nations, benefitting workers, farmers, ranchers and businesses in each country. The new agreement will expand U.S. exports, improve intellectual property protections and enforcement and create new provisions on digital trade.

Canada and Mexico purchase one-fifth of the total value of U.S. manufacturing output—more than the next 11 countries combined despite representing less than 4 percent of the global economy. These exports support about 2 million American manufacturing jobs and 40,000 small and medium-sized businesses. According to new state data from the NAM, Canada and Mexico purchase more manufactured goods from Michigan than the rest of the world combined, contributing $34 billion to the state economy each year.

A large chorus of Michigan businesses, chambers of commerce and industry organizations have all come out in support of USMCA passage.

-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 more than 12.8 million men and women, contributes $2.38 trillion to the U.S. economy annually, has the largest economic multiplier of any major sector and accounts for more than three-quarters 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 Manufacturers or to follow us on Shopfloor, Twitter and Facebook, please visit www.nam.org.

Press Releases

California Manufacturers Gather in Washington to Urge USMCA Passage

The National Association of Manufacturers Is Committed to Helping Manufacturers and Manufacturing Employees in California by Supporting USMCA Passage

Washington, D.C. – On Wednesday, July 17, the National Association of Manufacturers will bring manufacturing leaders from California and across the country together in Washington to urge Congress to pass the new U.S.–Mexico–Canada Agreement. Manufacturers will meet with their respective members of Congress to let them know why the USMCA is pivotal to their businesses and the 2 million men and women across the nation, including more than 95,000 in California, whose manufacturing jobs depend on exports to Mexico and Canada.

The USMCA is critical to the California economy, and swift passage will help restore certainty for manufacturers across the country, allowing them to grow and compete with the rest of the world, said NAM President and CEO Jay Timmons. Without this agreement, California’s manufactured goods exports could be subject to $10.1 billion in extra taxes, threatening manufacturing jobs across the state and hurting consumers and families.

The USMCA, which has been ratified by Mexico, modernizes and bolsters free trade between North American nations, benefitting workers, farmers, ranchers and businesses in each country. The new agreement will expand U.S. exports, improve intellectual property protections and enforcement and create new provisions on digital trade.

Canada and Mexico purchase one-fifth of the total value of U.S. manufacturing output—more than the next 11 countries combined despite representing less than 4 percent of the global economy. These exports support about 2 million American manufacturing jobs and 40,000 small and medium-sized businesses. According to new state data from the NAM, Canada and Mexico purchase more than one-quarter of California’s total global manufacturing exports, contributing $44 billion to the state economy each year.

A large chorus of California businesses, chambers of commerce and industry organizations have all come out in support of USMCA passage.

-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 more than 12.8 million men and women, contributes $2.38 trillion to the U.S. economy annually, has the largest economic multiplier of any major sector and accounts for more than three-quarters 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 Manufacturers or to follow us on Shopfloor, Twitter and Facebook, please visit www.nam.org.

Press Releases

Texas Manufacturers Gather in Washington to Urge USMCA Passage

The National Association of Manufacturers Is Committed to Helping Manufacturers and Manufacturing Employees in Texas by Supporting USMCA Passage

Washington, D.C. – On Wednesday, July 17, the National Association of Manufacturers will bring manufacturing leaders from Texas and across the country together in Washington to urge Congress to pass the new U.S.–Mexico–Canada Agreement. Manufacturers will meet with their respective members of Congress to let them know why the USMCA is pivotal to their businesses and the 2 million men and women across the nation, including nearly 115,000 in Texas, whose manufacturing jobs depend on exports to Mexico and Canada.

The USMCA is critical to the Texas economy, and swift passage will help restore certainty for manufacturers across the country, allowing them to grow and compete with the rest of the world, said NAM President and CEO Jay Timmons. Without this agreement, Texas’s manufactured goods exports could be subject to $37.3 billion in extra taxes, threatening manufacturing jobs across the state and hurting consumers and families.

The USMCA, which has been ratified by Mexico, modernizes and bolsters free trade between North American nations, benefitting workers, farmers, ranchers and businesses in each country. The new agreement will expand U.S. exports, improve intellectual property protections and enforcement and create new provisions on digital trade.

Canada and Mexico purchase one-fifth of the total value of U.S. manufacturing output—more than the next 11 countries combined despite representing less than 4 percent of the global economy. These exports support about 2 million American manufacturing jobs and 40,000 small and medium-sized businesses. According to new state data from the NAM, Canada and Mexico purchase half of Texas’s total global manufacturing exports, contributing $123 billion to the state economy each year.

A large chorus of Texas businesses, chambers of commerce and industry organizations have all come out in support of USMCA passage.

-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 more than 12.8 million men and women, contributes $2.38 trillion to the U.S. economy annually, has the largest economic multiplier of any major sector and accounts for more than three-quarters 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 Manufacturers or to follow us on Shopfloor, Twitter and Facebook, please visit www.nam.org.

Press Releases

Manufacturing Leaders Meet with Vice President Pence to Push Passage of USMCA

Manufacturers: We Need USMCA to Continue to Win

Washington, D.C. – A delegation of manufacturing leaders met with Vice President Mike Pence today to highlight the importance of the United States–Mexico–Canada Agreement to manufacturing in the United States.

The delegation included former NAM Board Chair and Emerson Chairman and CEO David Farr, Winton Machine Company Co-Owner and CEO Lisa Winton, Kent Corporation Chairman and CEO Gage Kent, General Motors Company Chairman and CEO Mary Barra, Sukup Manufacturing Co. President Charles Sukup and HM Manufacturing President Nicole Wolter.

“The Trump administration continues to show its steadfast commitment to America’s manufacturing workers,” said Farr. “Manufacturers in Missouri and across the nation are keeping our promise to grow, invest and hire. This historic agreement will help us sustain this momentum. Congress must act now and ratify this agreement.”

“Manufacturing in Georgia is stronger thanks to policies like tax reform and regulatory certainty,” said Winton. “To keep making significant contributions to local economies, we need certainty on trade, which means we need Congress to pass the USMCA. It’s essential to the livelihoods of Georgia manufacturing workers.”

Canada and Mexico are manufacturers’ top trading partners, purchasing one-fifth of the total value of U.S. manufacturing input—more than the next 11 countries combined. These exports support 2 million American manufacturing jobs and 43,000 small and medium-sized businesses. Comprehensive new state data from the NAM shows the USMCA’s positive impacts in each state and throughout the U.S. On Wednesday, the NAM is bringing manufacturing leaders from across the country together in Washington to urge Congress to pass the USMCA.

“The USMCA would undoubtedly strengthen and expand the U.S. food and agriculture industry—and all the sectors that support it, including manufacturers,” said Kent. “Agriculture is at the center of the Iowa economy, supporting countless jobs and industries. Each day that passes without the USMCA in place is a day that costs Iowa’s manufacturers and businesses.”

“General Motors has long supported efforts to modernize the agreement and believes passage of USMCA is vital to the success of the US automotive industry,” said Barra. “The certainty that comes from having USMCA in place will allow us to continue to invest in manufacturing in the United States with confidence.”

“American businesses need certainty in our trade policy to create jobs and grow,” said Sukup. “Without concrete, modern trade laws with our closest trading allies—Canada and Mexico—manufacturers in America won’t reach our full potential. On behalf of Iowa’s more than 25,000 employees whose jobs rely on North American trade, I urge Congress to swiftly pass the USMCA.”

“Tariff-free, modern trade is important for Illinois manufacturers, especially us small businesses,” said Wolter. “Selling what we make here to countries around the world helps us to remain competitive in today’s global economy. It also helps us to reinvest in our businesses, hire more employees and give back to the community.”

-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 more than 12.8 million men and women, contributes $2.38 trillion to the U.S. economy annually, has the largest economic multiplier of any major sector and accounts for more than three-quarters 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 Manufacturers or to follow us on Shopfloor, Twitter and Facebook, please visit www.nam.org.

Press Releases

Manufacturers: Time to Level Playing Field on China

Washington, D.C. – National Association of Manufacturers President and CEO Jay Timmons released the following statement on President Donald Trump’s meeting with Chinese President Xi Jinping:

A trade deal, not a trade war, is exactly what manufacturers have advocated over the last year and a half, and today’s meeting brings us closer to that goal. We will continue to seek a new structure for the U.S.–China commercial relationship that eliminates unfair practices and opens China’s market through strong enforceable new trade rules. Manufacturers are encouraged that the two countries will refrain from escalating tariffs further to allow for new rounds of negotiation.

Manufacturers need certainty now. For too long, manufacturers have paid the price while China has reaped the rewards of its unfair trade practices, intellectual property theft and exploitation of existing trade agreements. The effects of tariffs and retaliatory tariffs are further weighing on our confidence and our ability to hire and grow. With a more level playing field, we will be better equipped to reach our full potential.

A bilateral, enforceable trade agreement would be history-making and game-changing for America’s manufacturing workers. As the first business association to call for such an agreement, the NAM will continue to work with the administration to ensure manufacturers’ priorities are top of mind as U.S.–China talks continue.

The NAM first called for the administration to pursue a bilateral trade agreement with China in a letter from Timmons to President Trump in January 2018. The NAM has released a full negotiating objectives framework for an agreement that will address China’s unfair trade practices and level the playing field for manufacturers in the United States.

-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 more than 12.8 million men and women, contributes $2.38 trillion to the U.S. economy annually, has the largest economic multiplier of any major sector and accounts for more than three-quarters 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 Manufacturers or to follow us on Shopfloor, Twitter and Facebook, please visit www.nam.org.

733 10th St. NW, Suite 700 • Washington, DC 20001 • (202) 637-3000

Policy and Legal

Vice President Pence Talks USMCA at Pennsylvania Manufacturing Facility

Robotic packaging manufacturer JLS Automation received some distinguished visitors earlier this month when Vice President Mike Pence, Labor Secretary Alex Acosta and three members of Congress toured its manufacturing facility in York, Pennsylvania along with JLS CEO Craig Souser, National Association of Manufacturers President and CEO Jay Timmons and local manufacturing leaders. The event focused on advancing the United States-Mexico-Canada Agreement (USMCA), which would promote trade between the three countries and is currently being considered in Congress.

At the event, Vice President Pence spoke about the importance of the deal for manufacturers in the United States, noting that Pennsylvania already exports more than $14 billion in goods and services to Canada and Mexico. The vice president also highlighted the impact this deal would have on the more than 2 million American manufacturing jobs that depend on exports to Canada and Mexico—including 42,000 jobs in Pennsylvania, as outlined in the NAM’s own USMCA state fact sheet.  One in four Pennsylvania manufacturing firms export to North American partners, as the fact sheet further states, and more than 80 percent of them are small and medium-sized businesses.

Without a free trade agreement, Pennsylvania’s exports to North American free trade partners could face more than $1.5 billion in tariffs.

“It’s absolutely essential we get the USMCA passed by the Congress, and passed by the Congress this summer,” said Vice President Pence. “It’ll finally give American workers and farmers a level playing field that we need to be able to compete and win.”

The NAM has been vocal in its support of the USMCA, standing up for manufacturers like JLS Automation across the country that rely on trade in order to keep their businesses running.

“When we talk about growing international trade, we’re talking about something very, very local: strengthening our communities and supporting our families,” said Jay Timmons, NAM President and CEO. “That’s why JLS and manufacturers across the United States and the more than 12.8 million men and women who make things in America are calling on Congress to ratify the USMCA – and the sooner the better!”

At the event, JLS Automation CEO Craig Souser emphasized the importance of the Canadian market to his business—a family-run operation his father, Joseph L. Souser, founded—and urged lawmakers to pass the deal.

“We need to see our lawmakers in Washington help to expand our ability to penetrate this market with modern trade policies and pass the USMCA,” said Souser. “The administration has kept its promise to negotiate a new North American trade deal. So it’s time for the Congress and the Senate to do its part so that we can focus on what we do best: make world-class machines.”

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