Policy and Legal

Manufacturers need smart laws and effective policies. That’s why the NAM is standing up for manufacturers everywhere – from the halls of power where we advance important legislation, to the courts where we fight to defend our rights.

Policy and Legal

Treasury Rule Bodes Well for Manufacturers

The proposed regulations provide much-needed certainty.

Manufacturers scored a significant victory with the Treasury Department’s new proposed tax regulations, which would help implement the pro-growth intent of tax reform and save manufacturers from unintended U.S. tax on high-taxed foreign earnings.

Prior to passage of the Tax Cuts and Jobs Act of 2017, the high U.S. corporate tax rate discouraged companies from bringing their foreign earnings back to the United States. Tax reform moved the U.S. toward a territorial system, which allows businesses to bring foreign earnings back to the United States without an additional layer of U.S. tax. To make sure companies still paid some tax, however, the law also created a provision called Global Intangible Low-Taxed Income, essentially imposing a minimum 13.125 percent tax on foreign earnings.

While the move was intended to target low-taxed foreign income, the way the provision interacts with current international tax rules means that some manufacturers can be subject to U.S. tax on foreign earnings that are already taxed above 13.125 percent—effectively removing the upper limit that Congress envisioned and making the backstop largely meaningless. Manufacturers have repeatedly called on Treasury to integrate the Tax Cuts and Jobs Act and the existing tax system in a manner that achieves congressional intent.

“While there’s still work to be done, there’s no doubt that Treasury’s proposal is an important step in the right direction,” said NAM Vice President of Tax and Domestic Economic Policy Chris Netram.

“Congress intended to make it easier for manufacturers operating globally to reinvest their foreign earnings in jobs, in equipment and in infrastructure in the U.S.,” said Netram. “The proposed regulations provide much-needed certainty on the reach of this provision.”

This new proposed rule, coming after more than a year of hard-fought advocacy by the NAM, partially alleviates the burden through a high-tax exception companies can opt into. The elective high-tax exception offers companies with high-taxed foreign income the ability to avoid paying additional U.S. tax provided that the foreign tax rate is greater than 18.9 percent.

While higher than the intended 13.125 percent rate, the elective 18.9 percent rate still provides meaningful relief for manufacturers operating around the world, offering additional certainty and a chance to invest in further growth.

“This is an important positive development in moving closer to the intent of Congress and in allowing manufacturers to support their workers, grow their businesses and contribute to the American economy,” said Netram.

Policy and Legal

Manufacturers Speak Out for Dreamers

Manufacturing leaders are pushing for bipartisan comprehensive reform.

Jay Timmons on Fox Business talks about the NAM's A Way Forward immigration plan.

This week, the U.S. House of Representatives passed the American Dream and Promise Act. The legislation, which was introduced in March, offers a pathway to citizenship for unauthorized immigrants who were brought to the U.S. as children—collectively known as Dreamers—as well as immigrants under humanitarian protections, known as Temporary Protected Status.

Manufacturers in the United States have long been outspoken supporters of pragmatic, comprehensive immigration policies—and with a proposal for a pathway to citizenship for these immigrant populations under consideration in Congress, manufacturing leaders are pushing again for bipartisan comprehensive reform.

“Dreamers and Temporary Protected Status participants have become an integral part of our society and our workforce,” said National Association of Manufacturers President and CEO Jay Timmons in a letter to Congress. “They have the potential to offer so much more to our country if they can continue their pursuit of the American Dream.”

Manufacturers point to the importance of immigrants to the workforce, particularly in the manufacturing sector, which faces a significant skills gap. And they note that inconsistent administrative actions and unpredictable court decisions have created ongoing uncertainty and posed a serious challenge for these immigrants and businesses in need of new employees.

“Our workplaces reach their fullest potential and our communities and country are strongest when our nation’s immigration policy is clear and compassionate, and addresses economic, workforce and security needs,” said Timmons. “But today, our immigration system is failing to achieve those goals.”

In February, the NAM released its own immigration and border security proposal. The 16-page document, entitled “A Way Forward,” is a wide-ranging plan that includes border security and a permanent and compassionate solution for populations facing uncertainty, like the Dreamers. The plan includes priorities from both Democrats and Republicans and is designed to be pragmatic, comprehensive and achievable.

“If we act, we will have given those who deserve it a chance to be a productive and contributing part of our country,” said Timmons. “And we will have upheld the values that make this nation of immigrants exceptional: free enterprise, competitiveness, individual liberty and equal opportunity.”

News

Kansas Manufacturer Doubles Its Workforce

"We need laws, like tax reform, that can drive economic growth and drive business.”

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Ferroloy worker uses equipment.

Ferroloy, a Kansas-based small business that manufactures ductile and gray iron castings, was once on the verge of bankruptcy. But with the help of tax reform, they have doubled the size of their workforce and are in the process of dramatically expanding their facilities.

Mark Soucie, Ferroloy president and owner, bought the company back in 2017 when it had just 20 employees. The business was struggling to break even due to the collapse of the agricultural market, in which most of their customers were involved. Soucie and his team spent much of 2017 stabilizing Ferroloy. It became quickly evident, however, that the supercharged economy could deliver big gains.

“We could tell in early 2018 that activity was picking up, so we added a second shift and more than doubled our workforce by the end of the year,” Soucie explained.

“Now we are in the early stages of adding over 12,000 square feet to our facilities so that we can de-bottleneck the foundry, increase the size of the company’s machine shop and build an in-house pattern shop, which will allow the company to save money while also adding more jobs to their growing workforce,” Soucie said.

Soucie cited tax reform as a significant driver in allowing Ferroloy’s expansion plans to move faster than they otherwise would. More importantly, tax reform has ushered in the strongest economy in more than a decade, which is impacting Ferroloy by increasing demand for their products.

“To me, tax reform is an opportunity to level the playing field,” Soucie explained. “Large businesses have a significant competitive advantage due to scale and capability relative to smaller businesses. Over 50 percent of our working population is employed in small businesses. If you want small businesses to grow and prosper in this country, we need laws, like tax reform, that can drive economic growth and drive business.”

In Soucie’s eyes, keeping tax reform on the books is a no-brainer.

“I don’t understand why some people in Washington want to roll back something that allows small businesses to compete,” Soucie added. “Maybe it’s me being politically naïve, but economically, tax reform that allows small businesses to compete just makes sense.”

2018 was a record-setting year, as manufacturers reported the highest levels of optimism in the 20-year history of the NAM’s Manufacturers’ Outlook Survey.

“With tools like tax reform and regulatory certainty, manufacturing is thriving – and manufacturers are paying it forward,” Chris Netram, NAM vice president of tax and domestic economic policy, said. “Across the country, manufacturers small and large are hiring new employees, expanding operations, raising wages, improving benefits and more. Tax reform has fueled manufacturing, and the industry is propelling the American economy.”

Policy and Legal

Why the Ex-Im Bank is Critical for Manufacturers

The Ex-Im Bank helps U.S. manufacturers compete for deals around the world.

cargo unloaded at port of Los Angeles

In May, the U.S. Senate voted to confirm President Donald Trump’s nominees to the Export-Import Bank board. The board now has a quorum for the first time in four years, allowing it once again to consider deals larger than $10 million. Manufacturers’ attention now turns to securing congressional reauthorization of the Ex-Im Bank.

NAM President and CEO Jay Timmons explains what’s at stake.

The NAM is leading the fight for Ex-Im Bank reauthorization. Start with the basics. What does that mean?

Later this year, Congress will have to vote on whether to keep the Ex-Im Bank open and authorize it to continue helping manufacturers in the United States compete for deals around the world.

Why does the Ex-Im Bank matter so much to manufacturers?

It’s a vital tool to support manufacturing jobs in the United States. The Ex-Im Bank has supported 2.5 million jobs since 2000. Typically, more than 90 percent of the Ex-Im Bank’s transactions directly support small businesses.

And here’s something that’s really impressive — the Ex-Im Bank has generated $9.6 billion for taxpayers since 1992. It’s a government agency that makes money!

Other countries are running nearly 100 other export credit agencies. So, if we don’t have the Ex-Im Bank, we are at a big disadvantage.

You mention “export credit agencies.” You mean other countries have their own versions of the Ex-Im Bank?

Exactly. And they use those agencies to lure manufacturers to their countries, support their own manufacturers and steal manufacturing jobs away from the United States. That’s not going to change. So, we can “disarm” ourselves here in the United States and let other countries like China have the advantage. Or we can support the Ex-Im Bank.

So this all comes back to China?

Definitely. It helps level the playing field for manufacturers in the United States to compete with China, as well as other countries.

Two of China’s export credit agencies provided $45 billion in medium- and long-term investment support for projects around the world, more than the rest of the world combined. That’s what we have to compete against.

What can manufacturing workers or manufacturing supporters do to make a difference?

Contact your senators and representatives. Tell them to support the Ex-Im Bank and reauthorize it. Let them know that supporting the Ex-Im Bank is supporting American manufacturing workers.

Policy and Legal

Latest Move on Tariffs a ‘Molotov Cocktail’ of Policy

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National Association of Manufacturers President and CEO Jay Timmons warned today of the grave consequences of the administration’s plan to levy tariffs on Mexico, and ultimately manufacturing workers, to stem migration from Central America.

Saying that intertwining trade, tariffs and immigration creates a Molotov cocktail of policy, Timmons urged Congress and the administration to work together to find a comprehensive legislative solution on immigration, which manufacturers have offered in A Way Forward.

Click here to read Timmons’ full response.

Press Releases

NAM on Announced U.S. Tariffs on Mexico

Timmons: “These Proposed Tariffs Would Have Devastating Consequences on Manufacturers”

Washington, D.C. – National Association of Manufacturers President and CEO Jay Timmons released the following statement on announced U.S. tariffs on Mexico:

Manufacturers, like so many Americans and like President Trump, are frustrated with our broken immigration system and by the inaction that has led to a true humanitarian crisis. The answer to our broken system is a comprehensive, legislative solution, which manufacturers have offered in ‘A Way Forward.’ We continue to urge the administration and Congress to work together to address this crisis because the problem will not be solved just by blaming other countries. Intertwining difficult trade, tariff and immigration issues creates a Molotov cocktail of policy, and America’s manufacturing workers should not be forced to suffer because of the failure to fix our immigration system.

These proposed tariffs would have devastating consequences on manufacturers in America and on American consumers. We have taken our concerns to the highest levels of the administration and strongly urge them to consider carefully the impact of this action on working families across this country. Manufacturers have been working hard to secure passage of the U.S.–Mexico–Canada Agreement, and the last thing we want to do is put that landmark deal—and the 2 million manufacturing jobs that depend on North American trade—in jeopardy.

We will continue to work with leaders on both sides of the aisle on immigration reform, just as we are working to continue our hard-won progress on the USMCA. We cannot afford to put the livelihoods of millions of Americans at risk at the same time.

-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 impact 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

NAM on USMCA Statement of Administrative Action

Timmons: “Manufacturers Are Firmly Behind The USMCA”

Washington, D.C. – National Association of Manufacturers President and CEO Jay Timmons responded to the Trump Administration submitting the draft Statement of Administrative Action on the USMCA to Congress:

Manufacturers are firmly behind the USMCA, as is a growing chorus of state and local groups. The North American trading relationship is crucial to the success of manufacturing in America and more than 2 million manufacturing jobs. For manufacturers, the modernized agreement includes best-in-class intellectual property rules, sets new standards for innovation and the 21st-century digital economy, eliminates red tape at the border, improves transparency, ensures we can sell products duty free and much more.

After a promising ITC report, the end of North American steel and aluminum tariffs and real progress in Canada and Mexico, we are moving closer to making the USMCA a reality. Manufacturers want to see this momentum continue, including through constructive conversations between USTR and the Hill, so we can get USMCA across the finish line for the men and women who make things in America.

-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 impact 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

NAM Notches Win Against 2015 WOTUS Rule in Federal Court

Ruling Protects Manufacturers’ Right to a Fair and Transparent Rulemaking Process for Major Regulations

Washington, D.C. – National Association of Manufacturers Vice President for Litigation and Deputy General Counsel Peter Tolsdorf released the following statement after the U.S. District Court for the Southern District of Texas ruled that the Environmental Protection Agency’s 2015 Waters of the United States rule violated the Administrative Procedure Act:

For nearly four years, the Manufacturers’ Center for Legal Action has battled the overreaching WOTUS rule in the courts, and manufacturers have claimed another important victory, said Tolsdorf. The court’s ruling protects manufacturers’ right to a fair and transparent rulemaking process for significant environmental rules with multibillion-dollar impacts.

This rule was unreasonable on its face—it was a water regulation that went so far as to attempt to regulate dry land. This made compliance nearly impossible and put manufacturing jobs at serious risk. Manufacturers will continue to fight for fair, clear regulations that empower us to be responsible stewards of the environment while continuing to grow the U.S. economy.

In October, the NAM filed a motion for summary judgment in the U.S. District Court for the Southern District of Texas to invalidate the 2015 WOTUS rule.

Specifically, the court found that the EPA did not provide the public with reasonable notice and an opportunity to comment on the final rule’s definition of jurisdictional “adjacent waters.” The court also concluded that the EPA violated the APA by releasing the technical basis for the proposed rule only after the public notice and comment period had closed.

The NAM’s legal arm, the Manufacturers’ Center for Legal Action, has been in active litigation against the rule since July 2015, helping lead a large coalition of business groups to sue the EPA. Arcane procedural obstacles prevented the courts from hearing the merits of our legal challenge for several years. In early 2018, however, the MCLA scored a significant legal victory before the U.S. Supreme Court, which resolved those issues and has allowed litigation against the substance of the rule to proceed. The MCLA is also challenging the rule in a separate federal court in Georgia and has filed supporting amicus briefs in other legal challenges to the rule. To learn more about the MCLA, 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 more than 12.8 million men and women, contributes $2.38 trillion to the U.S. economy annually, has the largest economic impact 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.

Policy and Legal

Liquified Natural Gas Boom Impacts U.S. Manufacturers

U.S. Natural Gas Production Continues To Break Records

Cheniere Energy LNG export facility in Corpus Christi

Last month, the European Union announced that U.S. exports of liquified natural gas (LNG) to Europe had increased nearly 300% since 2016. This news came on the heels of a series of executive orders from President Trump designed to speed up energy infrastructure projects that enable manufacturers to carry natural gas to market.

Rachel Jones, the National Association of Manufacturers’ senior director of energy and resources policy, helps us break down what it all means.

Why is the U.S. experiencing a natural gas boom?

North America has more shale gas than any other place in the world. Technology is the other huge driver. The combination of horizontal drilling and hydraulic fracturing technologies is unlocking vast natural gas resources and changing the face of modern manufacturing in America.

This boom is set to keep growing. According to the Energy Information Administration, U.S. shale gas production is projected to more than double again over the next 25 years.

What is “liquified” natural gas (LNG)?

It’s really just natural gas that has been refrigerated until it turns into a liquid. When it comes out of the ground, natural gas is actually very thin and light. To make it easier to move around the world, it is turned into a liquid.

Why are investments in LNG export infrastructure so important for the U.S. manufacturing industry?

LNG terminals are massive infrastructure projects that create tens of thousands of jobs.

Golden Pass is a $10 billion investment in the Gulf Coast that will create jobs across the country for manufacturers who make compressors, heat exchangers, storage tanks, pipes, valves and other components of these state-of-the-art infrastructure projects. Golden Pass alone is projected to create 45,000 direct and indirect jobs during construction, plus several thousand more during operation. Cheniere’s Sabine Pass and Corpus Christi projects together represent an investment of approximately $30 billion in U.S. energy infrastructure. And the Driftwood project is poised to invest another $30 billion, creating nearly 50,000 direct and indirect jobs in at least 18 states.

How do President Trump’s recent executive orders promote LNG infrastructure development?

Manufacturers in the United States are ahead of their global competitors in the race to build the infrastructure needed to export LNG; however, an unnecessarily protracted regulatory process could cause a major disadvantage for these exporters.

In a big win for U.S. manufacturing workers, President Trump signed two long-anticipated executive orders intended to cut red tape and speed up the permitting process for energy infrastructure projects. These orders will promote badly-needed development of infrastructure to meet U.S. energy demand, create and support jobs for U.S. manufacturing workers, and provide reliable and affordable energy to U.S. consumers.

How does natural gas help manufacturers achieve sustainability goals? 

Climate Change is one of the biggest global challenges we face. Manufacturers understand this and are taking real action to protect our environment; natural gas is part of that story.

Modern natural-gas plants that replace aging power plants can mean an 80% reduction in carbon emissions. Further, because solar and wind can produce varying amounts of energy, having natural gas available on demand actually enables us to further invest in renewable resources.

Policy and Legal

As House Moves On DACA, NAM Reaffirms Support For Congressional Action

Congress must come together and pass a comprehensive, bipartisan immigration overhaul.

The National Association of Manufacturers (NAM) sent a letter to Congress Thursday signed by dozens of manufacturing leaders across the country urging a bipartisan overhaul of the current immigration system and requesting Congress assure a safe future for Dreamers and participants in the Temporary Protected Status (TPS) program.

On Wednesday, the House Judiciary Committee completed a markup of legislation to address two immigration populations currently facing uncertainty. One bill would provide permanent relief from deportation for Deferred Action for Childhood Arrivals as well as a conditional permanent resident status and another for TPS recipients that includes a path forward to legally remain in the United States.

The full House is expected to vote on this legislation in June.

“Dreamers, including participants in the Deferred Action for Childhood Arrival program, and participants in the Temporary Protected Status program continue to face uncertainty under our broken immigration system,” the letter from the NAM reads. “Congress needs to send a strong signal that we welcome their talents, contributions of hard work, desire for education, and if serving, support their willingness to wear the uniform of the armed forces.”

Earlier this year, the NAM released “A Way Forward,” a plan for comprehensive immigration reform that bolsters border security while strengthening the economy and providing certainty for those immigrants who are anxious about their future.

“Manufacturers are in the business of building solutions, and ‘A Way Forward’ is manufacturers’ commitment to fix our immigration system once and for all—one we believe can bridge the partisan divide on long-lasting immigration issues, as well as time-sensitive challenges that continue to arise,” NAM Vice President of Infrastructure, Innovation and Human Resources Robyn Boerstling said. “Our plan proposes seven core areas of action for Congress and the administration to take that will bolster national security, show compassion to those seeking a better life and strengthen the American workforce.”

The solution to the challenges facing our immigration system won’t come easily, but the path toward it is clear: Congress must come together and pass a comprehensive, bipartisan immigration overhaul. ‘A Way Forward’ provides a roadmap for how to accomplish that goal.

“America is indeed a nation of immigrants, but America has also become a nation with a broken immigration system,” NAM President and CEO Jay Timmons said in a letter earlier this year. “Manufacturers believe our leaders not only have an obligation to fix this system but also a historic opportunity to do so at a moment when Americans’ attention is focused on the issue like almost none other.

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