“Would support jobs, promote innovation and enhance the competitiveness of manufacturers across the United States.”
Manufacturers across the nation are seeking action this year to boost U.S. competitiveness and cut back on unnecessary taxes that have been holding back manufacturers in the United States. In addition to the very important tax reform effort that is underway right now, the House Ways and Means Trade Subcommittee will begin to review tomorrow another vehicle to eliminate out-of-date distortive taxes on manufacturers through the so-called Miscellaneous Tariff Bill (MTB).
For years, the National Association of Manufacturers (NAM) has been a leading advocate in support of congressional passage of the MTB because the United States’ own tariff code is imposing anti-competitive costs on manufacturers in the United States. Since the last MTB expired at the end of 2012, manufacturers have paid billions of dollars in tariffs on products not even made in the United States to the detriment of American competitiveness and well-paying American jobs. Consider that in some cases, manufacturers in the United States are paying import taxes on components not produced domestically, while foreign producers bring their final products in duty-free. These and other historical distortions in the U.S. tariff code must be corrected to create a level playing field for manufacturers right here at home.
In 2016, the House and Senate, with near-unanimous bipartisan support, created a transparent, objective, predictable and regularized process for congressional review and consideration of the MTB through the American Manufacturing Competitiveness Act of 2016 (AMCA). Through that process, thousands of petitions were reviewed over the past year by the independent U.S. International Trade Commission (ITC) and other parts of the U.S. government, and the ITC put together a final report for Congress with petitions that it deemed to meet the requirements of the AMCA. The more than 1,800 petitions to remove import tariffs on products included in the ITC’s report would eliminate tariffs of more than $350 million in 2018 and more than $1 billion over the next three years.
Congress now has the opportunity to move forward on an MTB that would remove—for three years—anti-competitive border taxes on imports of products not produced or available in the United States. Consider the stories of two manufacturers:
- Albaugh specializes in the production and packaging of post-patent crop protection products, and employs around 350 workers across the United States. Albaugh’s products are used throughout the United States by farmers who require access to competitively priced alternatives for their crop protection needs. In the past, the MTB benefited Albaugh by reducing the cost of raw materials not available domestically and enabling the company to maintain and grow jobs at its headquarters in Ankeny, Iowa, a production facility in St. Joseph, Missouri, and other locations throughout the country.
- Glen Raven is one of the world’s leading manufacturers of performance fabrics used in the furniture, automotive, safety, marine and sunshade industries, with more than 2,000 employees in the United States. Since the raw materials required to manufacture many of these fabrics are not available in the United States, Glen Raven relies on the MTB to ensure that these materials can be sourced competitively. The expiration of the MTB in 2012 resulted in a significant increase in Glen Raven’s manufacturing costs, which made the company less competitive in the global marketplace.
Tomorrow, the House Ways and Means Trade Subcommittee will hear from three additional manufacturers—Gowan USA, Lasko Products LLC and W.L. Gore & Associates—about how the MTB will help them grow manufacturing in the United States. There are many more stories like this across America, including from many small and medium-sized manufacturers, in industries ranging from chemicals and textiles to electronics, agriculture and beyond, all of which will be able to improve their competitiveness and their ability to sustain and grow well-paying American jobs with MTB passage.
The NAM applauds the Ways and Means Trade Subcommittee for holding this hearing and looks forward to working closely with both the House and Senate to move forward MTB legislation as quickly as possible, so manufacturers can knock down another anti-competitive tax.
Earlier today, Linda Dempsey, vice president of international economic affairs at the National Association of Manufacturers (NAM), testified at a public hearing on the modernization of the North American Free Trade Agreement (NAFTA), underscoring key areas to improve and modernize NAFTA in ways that will grow manufacturing and jobs in the United States.
For manufacturers throughout the United States, the North American commercial market is the most important market in the world, with Canada and Mexico alone purchasing one-fifth of all U.S.-manufactured goods production—more than the next 10 U.S. trading partners combined.
U.S. manufacturing output has nearly doubled since 1993, with U.S.-manufactured goods exports to Canada and Mexico alone supporting more than 2 million jobs in the United States and more than 43,000 manufacturing firms across the country. Partnerships among North American businesses have helped support this growth and the improved competitiveness of manufacturing in the United States.
NAFTA was negotiated before major technological and energy innovations helped transform what and how we manufacture in the United States. And furthermore, while U.S. negotiators sought to level the playing field fully in the original NAFTA negotiation, barriers and weaker standards remain in both Canada and Mexico.
In her comments today, Dempsey emphasized key points raised in the NAM’s June 12 public comments. Specifically, she focused on the need for a stronger NAFTA that grows American manufacturing, exports and jobs by:
- Eliminating remaining distortions and barriers in Canada and Mexico, including with respect to remanufactured goods and barriers on food product exports, particularly Canadian dairy tariffs and nontariff barriers;
- Raising standards to U.S. levels, including with respect to science-based regulatory practices, transparency, competition and state-owned enterprises, the protection of private property and investment overseas and intellectual property;
- Updating the agreement to include new digital trade provisions important to small manufacturers and those creating and relying on new technologies;
- Removing unnecessary red tape and duplicative regulations that are holding manufacturers back;
- Seeking greater collaboration by the United States, Canada and Mexico to take action to stop trade cheating from third countries; and
- Maintaining and improving neutral dispute settlement provisions.
The NAM and manufacturers embrace the opportunity to modernize NAFTA, and we are rolling up our sleeves to press for changes that further incentivize manufacturing in the United States and North America more broadly.
On April 26, National Association of Manufacturers Vice President of International Economic Affairs Linda Dempsey participated on a Farm Foundation panel on the “Future of the North American Free Trade Agreement” at the National Press Club in Washington, D.C. Dempsey was joined by Bob Stallman, former president of the American Farm Bureau Federation, and Melissa San Miguel, senior director of global strategies at the Grocery Manufacturers Association.
In her remarks, Dempsey explained the importance of the existing North American market for manufacturers in the United States and how millions of manufacturing workers and thousands of manufacturing firms depend on exports to Canada and Mexico. Dempsey also outlined a number of key principles that are critical for manufacturers in renegotiated agreement, including strong rules that reflect U.S. principles, law and values; strong intellectual property and digital economy rules; updated provisions that promote growth and competitiveness; the need to help, not hurt, America’s industries and workers; and the importance of concluding any NAFTA renegotiations in a timely manner.
Texas Instruments Inc. (TI) is a Dallas, Texas–headquartered company that designs, manufactures, tests and sells a diverse portfolio of semiconductors and other products used by more than 100,000 of the world’s most innovative companies. TI’s semiconductors in particular are used in products that range from personal electronics and automobiles to industrial automation equipment, medical devices and heating, ventilation and air conditioning (HVAC) systems.
The global supply chain is critical for TI and all U.S. semiconductor companies that, on average, derive more than 80 percent of their total revenue overseas, with Asia representing more than half of that revenue. A semiconductor designed at one of TI’s U.S. facilities and fabricated at U.S. factories may be sent to Trans-Pacific Partnership (TPP) countries, such as Malaysia, for additional processing. From there, the semiconductor may then be shipped to a product distribution center in Singapore before being sent to the customer, which incorporates it into an end product and ships it anywhere in the world.
As Paula Collins, TI’s vice president of government relations, said on a recent NAM Trade Podcast, “A TI chip that was designed in Manchester, New Hampshire, may travel 13,000 miles around the world, and eventually end up in any country in the world.”
TI operates multiple manufacturing, design and other facilities in nine states across the United States. This includes semiconductor manufacturing facilities in Texas (Dallas area, Sherman and Richardson) and Maine (South Portland) as well as more than a dozen design facilities in states around the country, including Texas (Dallas area, Austin and Sugar Land), New Hampshire (Manchester) and Arizona (Tucson and Phoenix), just to name a few.
According to Ms. Collins, “The TPP will support jobs in the United States and enhance TI’s ability to compete in the rapidly growing Asia-Pacific region by eliminating tariffs on advanced electronics and establishing new rules of the road, including in areas that have not been addressed in previous trade agreements.” Beyond tariff elimination, TPP benefits for TI include the following:
- A prohibition on forced technology transfers as a condition of market access or investment
- A requirement that partner countries accept commercial products with encryption without additional disclosure of confidential intellectual property or source code
- Strong patentability standards and protection of trade secrets
- Strong counterfeiting enforcement and penalties, which are critical because counterfeiting costs the U.S. semiconductor industry billions of dollars each year
- A ban on data localization requirements, critical for manufacturers like TI that support customers around the world, as requirements to store data locally would significantly increase the costs of doing business
On the NAM Trade Podcast, Ms. Collins added that “trade is going to happen with us or without us. I would rather have the United States be at the table, helping to protect U.S. values, helping to protect U.S. workers, helping to protect the U.S. environment, to ensure that we are helping to shape globalization, rather than just responding to it.”
Read more “TPP in Real Life” stories here.
Founded in 1968 and once known as the “king of the bagel baskets,” Marlin Steel Wire Products LLC is a Baltimore, Md., small business that has transformed and grown its manufacturing footprint to become a major supplier to industrial companies throughout the United States and globally, while saving and growing jobs in Baltimore.
Originally based in Brooklyn, N.Y., Marlin Steel moved to Baltimore when it was acquired by current President and Owner Drew Greenblatt in 1998. As demand for bagels declined and bagel basket imports flooded the U.S. market, Mr. Greenblatt recognized that Marlin Steel needed to shift the focus of its business to ensure continued growth.
In the early 2000s, Marlin Steel invested in automated manufacturing robots, which expanded productivity and allowed the company to focus on highly engineered products, such as wire baskets, mesh baskets, material handling baskets and steel racks and baskets, which are in demand by many other industrial sectors ranging from automotive and aerospace to machinery and pharmaceuticals. Employing 24 steelworkers at its Baltimore facility, small Marlin Steel is a supplier to many large industrial companies, including Boeing, Caterpillar, Cummins, Ford, General Electric, General Motors, Honda, Lockheed Martin, Merck and Toyota.
Marlin Steel exports to 39 countries, and 25 percent of the company’s sales and jobs depend on exports. Mr. Greenblatt says that “free trade agreements level the playing field for U.S. goods and open markets for ‘Made in the USA’ exports by eliminating anti-manufacturing taxes and other barriers. If we could get rid of tariffs through the Trans-Pacific Partnership (TPP), Marlin Steel could hire unemployed Baltimore steelworkers for jobs that pay $25 per hour—that is, if Congress passes this critical agreement.”
The TPP would eliminate all tariffs on products manufactured by Marlin Steel, including the 5 percent tariff charged on Marlin Steel’s exports to New Zealand and tariffs levied on these products by Vietnam (20 percent) and Malaysia (5 percent).
As Mr. Greenblatt underscored in a recent Fox News “The Deciders” segment, “If you want to grow jobs, if you want to grow our country, we need more clients; we need new markets. America only has 4 percent of the world’s population. We need to export like crazy, and that’s how we’re going to grow, and that’s how we’re going to hire unemployed steelworkers.”
Read more TPP in Real Life stories here.
Manufacturers throughout the United States rely on a host of services companies to help assemble, package and deliver their products domestically and around the world.
One such company is ALOM, the global contract assembly, packaging and supply chain leader headquartered in the Silicon Valley city of Fremont, Calif. ALOM operates out of three U.S. locations that cover the North American market, and the company also provides services from 17 locations globally.
ALOM procures, produces, configures and ships products for technology-rich companies in the automotive, medical, telecommunications, technology, energy/utility and other regulated industries. ALOM’s customers include Fortune 100 companies, and it is part of a $750 billion ecosystem. On the supplier side, the ecosystem includes numerous small suppliers, including many veteran- and women-owned businesses, such as Container Consulting Service Inc., which provides customized packaging containers, and Superior Group, which provides contract labor.
While ALOM’s customers successfully manufacture and sell products within the United States, many also export to markets around the world. ALOM and its customers benefit from trade agreements like the Trans-Pacific Partnership (TPP) that eliminate tariff and non-tariff barriers, set strong rules that prohibit government restrictions on the movement of data and the localization of information technology infrastructure and make it easier to ship products due to more transparent and streamlined customs rules.
ALOM President and CEO Hannah Kain says that “TPP will aid ALOM in expanding our business into more TPP countries—beyond our growing businesses in places like Australia, Canada and Mexico—in turn enabling ALOM to support more jobs here in the United States.”
Ms. Kain adds that “without quick access to high-quality, competitively priced components, and the ability of our customers to access markets overseas, ALOM would have a hard time competing.” Ratification of trade agreements like the TPP will be critical as companies like ALOM seek to grow and expand their manufacturing-supporting businesses in the years ahead.
If you’ve ever washed your hands or changed your child’s diaper in a public restroom, it’s likely you’ve encountered goods crafted in America by Bobrick Washroom Equipment Inc. Headquartered in Los Angeles, Calif., since its founding in 1906, Bobrick is the world’s leading manufacturer of restroom accessories for commercial building owners, and the company markets its products under the Bobrick, Gamco and Koala Kare brands. It manufactures products in California, Colorado, New York, Oklahoma and Tennessee.
While selling extensively throughout the United States, Bobrick has been able to grow by expanding its global focus. Bobrick exports restroom accessories to more than 100 countries in Europe, the Middle East, Africa, Asia and Latin America, including all Trans-Pacific Partnership (TPP) countries, and has operations in the United Kingdom, Singapore, United Arab Emirates and Australia.
According to Alan Gettelman, Bobrick’s vice president of external affairs, “Free trade agreements have lowered many of the tariff and non-tariff barriers that Bobrick has faced overseas, allowing us to improve access to these markets and increase our competitiveness. The elimination of all manufacturing tariffs under the TPP would level the playing field for our company’s exports to these countries, allowing us to boost sales of products crafted throughout the United States.”
To illustrate the importance of the TPP for Bobrick, consider the company’s SureFlo automatic soap dispensers, which are manufactured at its Los Angeles, Calif., facility. Imports of soap dispensers currently face duties of 24 percent in Vietnam, 5 percent in Malaysia and 5 percent in New Zealand.
As another example, Bobrick’s grab bars are manufactured in Clifton Park, N.Y., and face import duties of 20 percent in Vietnam, 5 percent in Malaysia and 5 percent in New Zealand.
And consider Bobrick’s Koala Kare brand baby-changing stations and child-seating products, which are manufactured in Denver, Colo., and face import duties of 25 percent in Vietnam and 5 percent in New Zealand.
Finally, take Bobrick’s restroom mirrors, which are manufactured in Jackson, Tenn., and Durant, Okla., and currently face duties of 34 percent in Vietnam, 30 percent in Malaysia and 5 percent in New Zealand.
All of these tariffs, and thousands of others, will be eliminated on U.S.-manufactured goods exports when the TPP is fully implemented. Bobrick will be able to see substantial savings immediately on many of its exports to these markets, and most of the duties facing its exports will be eliminated within four years of the TPP’s entry into force.
The TPP will also eliminate other discriminatory barriers faced by Bobrick and other manufacturers in TPP countries and will improve Bobrick’s ability to export through more transparent and streamlined customs rules. All in all, the TPP will help level the playing field for Bobrick and other manufacturers across the United States, helping U.S. manufacturing increase sales and support jobs right here at home.
Read more “TPP in Real Life” stories by clicking here.
If you have put your bags through a security screening device at airports and federal buildings or have known anyone who has needed out-patient oncology treatment, then you, like hundreds of millions of other Americans, have likely benefited from the technology manufactured by Smiths Group here in the United States, without ever realizing it.
Smiths Group employs more than 8,000 people in the United States at facilities in 40 states and across five divisions: John Crane, Smiths Medical, Smiths Detection, Smiths Interconnect and Flex-Tek. The company develops and applies leading-edge technology to create innovative products and solutions that range from health care, energy and petrochemicals to threat and contraband detection, telecommunications and equipment manufacturing. Though it’s headquartered in the United Kingdom, about one-third of Smiths Group’s workforce, half of its capital base and half of its revenue are located in the United States.
While sales in the United States are important to Smiths Group, as reflected by its big investments throughout the United States, so too are sales overseas. As the company seeks to expand its U.S. production, it also is working to export around the world medical technologies that save lives, screening technologies to help governments protect their citizens and products and services that ensure communities have the energy needed to power their societies. That is why trade agreements that will eliminate foreign trade barriers and improve standards, such as the Trans-Pacific Partnership (TPP), are so important to Smith Group’s U.S. operations and its employees.
For example, the United States currently exports $5 billion worth of medical devices to TPP markets each year. Currently, the United States faces tariffs as high as 30 percent on certain medical devices in Malaysia. Under the TPP, the tariffs on 99.9 percent of U.S. exports of medical devices will be eliminated immediately, making Smiths Medical’s lifesaving technologies more readily available to patients in need.
Another one of Smiths Group’s business divisions, John Crane, designs, manufactures and services a variety of products, including mechanical seals, couplings, bearings and filtration systems for industrial rotating equipment. This equipment is critical to the safety, efficiency, reliability and environmental footprint of rotating machinery.
A significant portion of John Crane revenue comes from the export of products to TPP countries, including Australia, New Zealand, Singapore and Vietnam. Once the TPP is implemented, the duty savings for John Crane’s exports of these goods to TPP countries will be reinvested to improve and expand its U.S. operations.
According to Chris Swonger, senior vice president of global government relations, “TPP is a unique opportunity for companies like Smiths Group to increase sales of goods and services in overseas markets through the elimination of unnecessary tariffs. As a result of these duty savings, Smiths Group will be able to expand research and development in new technologies, supporting new jobs and manufacturing in the United States.”
The next time you put your bags through a security device or stop by the doctor’s office, take a look to see if you benefit as well from a Smiths Group product manufactured here in the United States.
Subaru of Indiana Automotive, Inc. (SIA) first broke ground in Lafayette, Indiana more than 29 years ago and is the home of Subaru’s North American production. Models built at SIA’s Lafayette, Ind., plant include the Subaru Legacy and Outback. Later this year, production of the Impreza will be moved to the Lafayette facility from Japan, where SIA’s parent company, Fuji Heavy Industries Ltd. (FHI), is headquartered. Even more exciting, an as-yet-unnamed three-row crossover vehicle will be added at SIA in 2018.
SIA has seen rapid growth in its Indiana vehicle manufacturing in recent years, with production expected to exceed 340,000 vehicles in 2016, an increase of nearly 40,000 vehicles compared to the prior year. To meet and accelerate this rapid growth, SIA has invested more than $1.3 billion over the past four years to prepare for Impreza production and expand its Lafayette facility, including expanding capacity in its engine and body shops and building a second paint shop.
SIA’s Lafayette facility employs more than 5,400 associates, and the company has added more than 1,300 associates in the past year to support the production of new models and growth. These job increases in turn support the broader Lafayette and Indiana economy. New jobs created by SIA have a multiplier of 11.4, meaning that for every job created by SIA, more than 11 other jobs are created in other Indiana businesses, according to 2010 estimates by the Center for Automotive Research.
As an automaker operating in the global economy, free and fair trade is essential to SIA’s operations. In the past, SIA has exported vehicles to more than 52 countries in a single year. During the past five years, nearly 62,000 vehicles built at SIA have been exported to other countries, including more than 53,000 vehicles shipped to Canada. Due to the high demand for the Legacy and Outback in the United States, SIA currently only exports to two other countries—Mexico and Colombia—plus Puerto Rico. However, with expansion and new models, SIA exports are expected to grow.
According to SIA Senior Executive Vice President Tom Easterday, “SIA strongly supports efforts to establish free and fair trade between the United States and its most significant trading partners, including through agreements such as the TPP. As our track record demonstrates, SIA’s exportation of vehicles to global markets clearly supports the creation of manufacturing jobs in Indiana, and we’re excited about the further job growth SIA and our suppliers have experienced due to the upcoming start of production of the new Impreza here in the United States.”
Read more from the “TPP in Real Life” series here.