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Ken Monahan

New Interactive Tool, Developed by Esri, Visualizes Importance of NAFTA for U.S. States

By | Shopfloor Main, Trade | No Comments

The National Association of Manufacturers (NAM) is pleased to introduce a new NAFTA-focused web application, prepared by Esri, the world’s most advanced technology provider of GIS and location intelligence. The tool allows manufacturers, workers, policymakers and other individuals to view historical trade flows of manufactured goods across NAFTA countries, including by individual state, groups of states, by year of imports and exports and compared to global trade flows. In the near future, the web app will be expanded to include historical, interactive NAFTA import and export data, at the state level and by product category.

This interactive tool developed by Esri, together with a series of detailed state fact sheets released by the NAM on May 4, helps to underscore the importance of extensive NAFTA relationships for manufacturers of all sizes and sectors across the United States.

Little Understood Government Process Could—if Congress Acts—Provide Tax Cuts for Individuals and Manufacturers

By | General, Shopfloor Policy, Taxation, Trade | No Comments

Though many don’t know it, Americans pay both directly or indirectly about $1 million a day in government-imposed import taxes on products not made or available in the United States, including everyday items like swim goggles, smartphone cases and pepperoncini. Why? It’s a long story, but it essentially comes down to the fact that the United States has a very old tariff code, and it has been nearly a decade since Congress has gotten around to addressing these unfair, out-of-date, distortive and anticompetitive taxes by passing the so-called Miscellaneous Tariff Bill (MTB). Thankfully, the U.S. House of Representatives passed an MTB bill, the Miscellaneous Tariff Bill Act of 2018, on January 16 by a margin of 402 to 0. Now, it is the Senate’s turn to approve the legislation. It must do so without delay.

Here’s some important background on the issue.

Back in 2016, Congress took a major step toward modernizing the way products are considered under the MTB with its near unanimous passage of the American Manufacturing Competitiveness Act of 2016 (AMCA). The AMCA established a regularized process for Congress to consider the elimination of individual import taxes for products not made or available in the United States—and a few key elements from that rigorous and thorough process follow below:

  • Detailed petition. Each request for tariff suspension required a detailed petition, identifying the product and providing information that it is not produced or available in sufficient quantities in the United States. A total of 2,524 petitions were filed and reviewed in this process. (An additional 638 petitions were filed but later withdrawn.)
  • Public review, with comments. All petitions were posted online and comments were requested from the public, at the start of the process, on whether the petition met statutory requirements under the AMCA, including that there were no objections from domestic manufacturers of similar products. More than 800 comments were submitted on the petitions filed in 2017.
  • Review of all petitions for eligibility. Each of the petitions was reviewed by the U.S. International Trade Commission (ITC) with input from the U.S. Department of Commerce, U.S. Customs Bureau Protection and other executive branch agencies to determine if each petition met all the eligibility criteria. Several reports were released to the public summarizing these findings. Overall, more than 27 percent (or 697 petitions) were rejected as not eligible, including for reasons of domestic availability, as discussed below.
  • Broad U.S. government review of domestic production and availability. As required by the statute, the U.S. government review did not just look at identical products, but also products that were “directly competitive” with the product to ensure that no domestic industry was producing a similar product that might prefer to keep the tariff in place. U.S. government officials reviewed not only the comments received but proactively reached out to industry sectoral groups and individual businesses to ask if the same or competing product was available domestically. Nearly 500 petitions, or nearly 20 percent of the total, were not recommended by the ITC for inclusion in MTB legislation due to objections by domestic producers.

After all that work and more than nine months of engagement with stakeholders, a final package of eligible products was sent in August to the House and Senate, which also reviewed the products (with the ability only to strike products, not add them to the package). That rigorous process has produced a final MTB with nearly 1,700 products eligible for tariff elimination or reductions. Notably, such tariff relief is not permanent, as it only lasts for three years in case there are domestic manufacturers that want to produce any of these products and might prefer the application of the tariff. These products include both inputs used by many manufacturers throughout the United States (more than 75 percent of the products are inputs, according to National Association of Manufacturers (NAM) analysis), and some final goods that will directly benefit consumers and purchasers, in a manner that is fully consistent with the AMCA.

  • As one example, certain U.S. imports of performance footwear face tariffs ranging from 20 to 37.5 percent, which add unnecessary costs to U.S. consumers and harm our manufacturers and workers. Such imported performance footwear products incorporate made-in-America components, such as the GORE-TEX® laminate that is manufactured in Cecil County, Maryland. GORE-TEX® laminate is exported, incorporated into performance footwear and ultimately returns to the United States. Tariff relief for such footwear products, which are included in the MTB package, would support American jobs and incentivize continued investments in technology such as GORE-TEX.®
  • As another example, Lasko Products LLC is the only U.S. manufacturer of electric pedestal and desktop fans sold at retailers across the United States, but Lasko pays import taxes on fan motors not manufactured in the United States, making it more difficult for the company to compete with fans imported from China. These fan motors are also included in the current MTB package.

As required by international trade rules, these tariff suspensions also apply to all goods entering the United States from all countries. To do otherwise would invite retaliation and higher costs or barriers for U.S. manufacturers exporting overseas.

So, a lot of hard work has gone into addressing this issue, but we are not yet past the finish line. The NAM and manufacturers and other businesses across the United States are doubling-down to urge final congressional passage of the Miscellaneous Tariff Bill Act of 2018 as soon as possible so we can eliminate unnecessary taxes on families and manufacturers. Based on NAM analyses, the Miscellaneous Tariff Bill Act of 2018 would eliminate unnecessary import tariffs of more than $1.1 billion over three years, helping both consumers and manufacturers, with an estimated boost to U.S. manufacturing output of $3.1 billion.

The House already acted last month, and it passed this bill without a single vote in opposition. We are now urging the Senate to demonstrate its strong bipartisan support for the MTB by moving quickly to approve this important legislation.

Time to Move the MTB to Boost U.S. Jobs by Cutting Another Unnecessary Tax on Manufacturing in America

By | Economy, Shopfloor Economics, Shopfloor Main, Trade | No Comments

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 ITCs 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.

 

 

NAM Testifies on How to Grow Jobs and Manufacturing in North America Through a Renegotiated NAFTA

By | Shopfloor Policy | No Comments

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 productionmore 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.

NAM Moves Forward a Positive Discussion on NAFTA

By | Shopfloor Policy, Trade | No Comments

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 Agreementat 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. 

TPP in Real Life: How a Texas Instruments Semiconductor Designed in New Hampshire Can Travel 13,000 Miles and Power the World

By | Shopfloor Main, Shopfloor Policy, Trade | No Comments

Texas Instruments Inc. (TI) is a Dallas, Texasheadquartered 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.

Texas Instruments Wafer Manufacturing Facility in Dallas, Texas. Photo Courtesy: Texas Instruments

TI wafer manufacturing facility in Dallas, Texas. Photo courtesy of TI.

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.”

USB Power Switch Found in PC Notebooks, 3D Printing and Other Devices. Photo Courtesy: Texas Instruments

USB power switch found in PC notebooks, 3D printing and other devices. Photo courtesy of TI.

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.

TPP in Real Life: From Bagel Baskets to Highly Engineered Industrial Products, Why One Baltimore-Based Small Business Says We Need to Pass TPP and Export Like Crazy

By | Shopfloor Main, Shopfloor Policy | No Comments

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.

Marlin Steel Facility in Baltimore, Maryland. Photo Courtesy: David Bohrer / National Association of Manufacturers

Marlin Steel facility in Baltimore, Md. Photo courtesy of David Bohrer/National Association of Manufacturers.

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 Wire Conveyor Basket used by Automotive Industry on Assembly Lines in Michigan, Kentucky, Indiana and Ohio. Photo Courtesy: Marlin Steel Wire Products LLC

Marlin Steel wire conveyor basket used by the automotive industry on assembly lines in Michigan, Kentucky, Indiana and Ohio. Photo courtesy of Marlin Steel Wire Products LLC.

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 hourthat 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.

TPP in Real Life: TPP Helps California-Based Company Connect the Dots for Manufacturers

By | Shopfloor Main, Shopfloor Policy | No Comments

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 Headquarters in Fremont, California. Photo Courtesy: ALOM

ALOM headquarters in Fremont, Calif. Photo courtesy of ALOM.

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’s Global Footprint. Image Courtesy: ALOM

ALOM’s global footprint. Image courtesy of ALOM.

ALOM President and CEO Hannah Kain says that “TPP will aid ALOM in expanding our business into more TPP countriesbeyond our growing businesses in places like Australia, Canada and Mexicoin 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.

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