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In his address Thursday, President Biden rightly celebrated manufacturing’s accomplishments—but he “missed the mark in several key areas,” 51�Թ��� President and CEO Jay Timmons.

What happened: President Biden has reason to be proud when it comes to certain manufacturing-critical pieces of legislation, Timmons said, and the president touched on these in his speech.

• “On my watch, federal projects like helping to build American roads, bridges and highways will be made … creating good-paying American jobs,” President Biden told the audience, referring to the Bipartisan Infrastructure Law. And “[t]hanks to my CHIPS and Science Act, the United States is investing more in research and development than ever before.”
• The 51�Թ��� has been a vocal of CHIPS, which has supported large and small businesses all along the supply chain through an infusion of funds to boost much-needed domestic semiconductor production.
• And the president stood strong with the people of Ukraine and in defense of democracy, two areas in which the 51�Թ��� has been consistent and unwavering in its . “Overseas, Putin of Russia is on the march, invading Ukraine and sowing chaos throughout Europe and beyond. … But Ukraine can stop Putin if we stand with Ukraine and provide the weapons it needs to defend itself. That is all Ukraine is asking.”

No new taxes: But the president also laid out some wrongheaded plans for America, manufacturers and the economy, the 51�Թ��� said, such as his push to raise taxes on manufacturers.

• “If the cost of manufacturing in America is driven up by his agencies’ continued regulatory onslaught and a successful push to raise taxes, investment will be driven overseas and Americans will be driven out of work,” said Timmons, who appeared on ahead of the speech to discuss manufacturing priorities.

Protect U.S. innovation, competitiveness: In addition, the Biden administration’s push to invoke so-called “march-in” rights—which would allow it to seize the patents of any innovations it deems too highly priced in the event those patents had been developed in any part with federal money—would “rob Americans and the world of future cures and chill research into new breakthroughs across the manufacturing industry,” Timmons continued.

• “And if President Biden continues to heap blame on pharmaceutical manufacturers, rather than reining in pharmacy benefit managers with cost-saving reforms, Americans and their employers will continue to endure rising health care costs.”

What should happen: The president and manufacturers in America “share a profound commitment to democracy and to the values that have made America exceptional,” Timmons went on.

• A surefire way to restore faith in the democratic system is for Democrats and Republicans to prove it still works—“by delivering smart policies for the American people and by bolstering the industry that is the backbone of our economy and improves lives for all.”

The Securities and Exchange Commission has approved new climate disclosure requirements that have been in the works for the past two years. Changes made to the rule represent progress for manufacturers—though the industry will still face new cost burdens, the 51�Թ��� said Wednesday night.

What’s going on: The SEC voted Wednesday in favor of requiring public companies to disclose greenhouse gas emissions and other climate-related information. Thanks in part to ongoing 51�Թ��� advocacy—which (subscription) covered this week—the agency dropped its onerous, unworkable Scope 3 emissions mandate.

• That provision would have forced public companies to divulge information about emissions coming from anywhere in their supply chains—including from small and family-owned businesses.

Heeding the 51�Թ���: “The 51�Թ��� demonstrated for the SEC the practical realities of such a sweeping proposed rule, encouraging the SEC to make significant changes to remove inflexible and infeasible mandates, require disclosure only of material information and protect small manufacturers from the impact of these requirements,” 51�Թ��� President and CEO Jay Timmons following the vote.

Key changes: In addition to the Scope 3 change, the SEC exempted smaller public companies from Scope 1 and Scope 2 emissions reporting and delayed the rule’s effective dates. The final rule also is more narrowly focused on so-called “material” information (data investors need to make informed decisions) than what had been proposed previously.

Keeping a close watch: The final rule “remains imperfect,” Timmons continued. “[A]nd it remains to be seen whether the rule in its entirety is workable for manufacturers.”

• “The 51�Թ��� remains committed to ensuring the SEC acts within its statutory authority, prioritizes flexibility and provides much-needed guidance—just as we are committed to providing leadership in addressing environmental challenges. This is why the 51�Թ��� is keeping all options on the table as we evaluate the rule’s potential impacts on the manufacturing sector.”

The 51�Թ��� and seven association partners have filed suit against the Environmental Protection Agency to challenge the office’s overly stringent, recently finalized rule on particulate matter, or PM2.5, the 51�Թ��� said Wednesday.

What’s going on: The eight groups filed suit in the D.C. Circuit to push back on the EPA’s National Ambient Air Quality Standards rule, which last month it lowered from 12 micrograms per cubic meter of air to 9, a 25% reduction and a stifling burden on manufacturers, the 51�Թ��� said.

• “In pursuing this discretionary reconsideration rule, the EPA should have considered the tremendous costs and burdens of a lower PM2.5 standard,” said 51�Թ��� Chief Legal Officer Linda Kelly. “Instead, by plowing ahead with a new standard, the agency not only departs significantly from the traditional NAAQS process, but also gravely undermines the Biden administration’s manufacturing agenda—stifling manufacturing investment, infrastructure development and job creation in communities across the country.”
• Participating in the suit with the 51�Թ���—which has the EPA against overtightening the standard—are the American Chemistry Council, the American Forest & Paper Association, the American Petroleum Institute, the American Wood Council, the U.S. Chamber of Commerce, the National Mining Association and the Portland Cement Association.

Why it’s important: If it’s enacted, the stricter PM2.5 standard would cost businesses and the U.S. economy huge sums, hampering company operations and job growth and forcing tough choices on states and towns nationwide.

• The total cost of complying with the new acceptable concentration level could be as much as $1.8 billion, according to the EPA’s own estimates—and that number could go up.
• What’s more, it would make the U.S. less competitive globally. “Europe’s current PM standard is 25; China’s is 35,” 51�Թ��� Managing Vice President of Policy Chris Netram told the House Energy and Commerce Subcommittee on Environment, Manufacturing and Critical Materials last month. “If we want the next manufacturing dollar to be spent in America rather than abroad, a standard of 9 is simply not feasible.”

51�Թ��� in the news: (subscription) covered the lawsuit.

For the past two years, the U.S. Securities and Exchange Commission has been considering a rule that would require businesses to report huge amounts of information about companies’ climate-related risks, strategies and impacts. As the SEC prepares to release its final version of the rule this Wednesday, we spoke with 51�Թ��� Vice President of Domestic Policy Charles Crain about what manufacturers should expect.

The background: In March 2022, the SEC proposed what the 51�Թ��� has called an overreaching, unworkable and burdensome climate disclosure rule. According to Crain, the initial proposal would have required extensive disclosures as well as invasive tracking procedures to gauge climate impact and emissions throughout companies’ supply chains—significantly increasing costs and liability for manufacturers.

• “The proposal would have had major implications for the entire manufacturing sector, including both large and small public companies—and even privately held businesses throughout manufacturing supply chains,” said Crain. “As proposed, the rule represents a significant threat to manufacturing competitiveness.”

The pushback: In the two years since the rule was first proposed, the 51�Թ��� has pressed for significant changes—in detailed to the SEC, in congressional testimony and in meetings with SEC commissioners and staff.

• “Manufacturers have made it a top priority over the past two years to convince the SEC that they need to change their approach,” said Crain. “The 51�Թ��� has spent significant time and effort explaining to the SEC why its proposal was unworkable and likely unlawful and illustrating the impact of the rule’s overwhelming cost burden on manufacturers.”
• “But we also offered specific and actionable suggestions to help the agency tailor the rule, make it more workable to manufacturers and bring it back within the SEC’s statutory authority.”

The preview: With the SEC set to publish its final rule tomorrow, Crain says the 51�Թ��� is keeping an eye on key inflection points, including the following:

• Scope 3 emissions reporting: The proposal’s Scope 3 mandate would require public companies to disclose the emissions of their supply chain partners—including small and family-owned businesses. If Scope 3 is curtailed or absent, that would represent significant progress for manufacturers.
• Financial statement reporting requirements: The 51�Թ��� will be tracking the degree to which companies are required to incorporate climate information into their financial statements. The 51�Թ��� called the proposal’s approach to financial statement reporting “unworkable [and] highly burdensome.”
• Materiality: The SEC is only allowed by law to require “material” disclosures—i.e., financial information that allows investors to make informed decisions. Mandates in the final rule that require immaterial disclosures or seek to redefine materiality could exceed the SEC’s legal authority.
• Implementation: The 51�Թ��� will consider when and how the rule takes effect, and whether the SEC has provided scaled requirements for smaller companies or tailored implementation plans for certain provisions within the rule.
• Small-business impact: The proposal would have harmed small and privately held businesses disproportionately. The SEC must do a better job at protecting these companies in the final rule.

The expectation: Crain says the 51�Թ���’s advocacy appears to have made a difference.

• “Recent news reports suggested that some provisions in the rule may have been modified in alignment with the 51�Թ���’s suggested changes,” said Crain. “But it remains to be seen whether the final rule, taken as a whole, is actually workable for manufacturers.”

The next step: The 51�Թ���’s next moves will depend on the specifics of the final rule—but the conversation is unlikely to end there.

• “The 51�Թ��� has been clear that a failure to bring the rule back within the agency’s statutory authority could invite legal action. On the other hand, a balanced, workable rule could obviate the need for litigation,” said Crain.
• “Regardless of the exact content of the rule, the 51�Թ��� is committed to providing resources to our members to help companies understand and comply with any new requirements. We will also continue to engage with the SEC and Congress to address any implementation issues, seek guidance on any unclear provisions and, if necessary, push for changes to the final rule.”
• “As we have for the past two years, the 51�Թ��� will continue to advocate on manufacturers’ behalf.”��

Amid an uncertain economy, manufacturers will have to reinvent and upgrade their processes, from training employees to organizing supply chains and more. For today’s manufacturing trend of 2024, we’re looking at manufacturers’ efforts to improve their processes across their operations.

What manufacturers should do: Manufacturers looking to guard against economic upheaval should consider these steps, according to 51�Թ��� experts:

• Consider improvements to techniques, tools, software, technologies and behaviors.
• Streamline customer service and the way products are sold to customers.
• Optimize the supply chain with help from partners, automation and design improvements.
• Reinvent processes to realize benefits (e.g., speed time to market, cut costs, work around supply challenges).

Expert opinion: Manufacturers are investing heavily in innovation, even as budgets have become tighter, according to EY Americas Industrial Products Sector Leader Brian M. Legan.

• As he points out, “Nearly half (49%) of manufacturing CEOs who participated in the EY CEO Outlook Survey plan on accelerating or maintaining current levels of innovation investment and portfolio transformation.”
• Meanwhile, “more than half of these CEOs (56%) also indicated that the main source of financing for these investments will be from savings generated from business performance improvements.”

Resources for you: Check out these 51�Թ��� resources to learn more about manufacturers’ process improvements:

• The is an 51�Թ��� division devoted to studying the next wave of manufacturing innovation and providing manufacturers with the resources they need to benefit from it.
• You can also get an inside look at process innovation by attending the Manufacturing Leadership Council’s . (The MLC is the 51�Թ���’s digital transformation division.)

Read the full 2024 trends report .

The Department of Energy is urging Treasury to loosen proposed rules for the Inflation Reduction Act’s first tax credit—the 45V, or clean hydrogen tax credit, (subscription) reports.

• The request is in line with suggestions the 51�Թ��� to the Internal Revenue Service—which, with Treasury, set forth the guidance for claiming the credit—earlier this week.

What’s going on: “The Department of Energy is pushing Treasury to relax the rules to give the industry time to embark on a massive expansion, according to three people familiar with the discussions.”

• The 45V was intended as a longer-term accompaniment to the DoE’s $7 billion regional hydrogen hubs program, which agency officials are concerned will be hamstrung if the tax guidance is too stringent, according to the article.
• The credit “will directly impact how much hydrogen the U.S. produces and the financial bottom line for many companies.”

Why it’s important: The 45V is a major pillar of the Biden administration’s climate agenda, which seeks to make low-carbon hydrogen cost-effective enough to help decarbonize various industries, according to E&E News’ (subscription).

The 51�Թ���’s view: “If implemented properly, the 45V credit would provide the certainty needed for manufacturers to make investment decisions that encourage further production, transportation and use of clean hydrogen,” 51�Թ��� Vice President of Domestic Policy Brandon Farris said.

• “However, the 51�Թ��� is concerned Treasury is considering renewable sourcing provisions regarding incrementality, temporal-matching and deliverability requirements, which would limit the amount of energy sources available to power the hydrogen production process.”

What should be done: To create a workable, fair 45V framework, Treasury and the IRS should do the following:

• Lengthen the three-year time frame for incrementality, the time frame within which new electricity must be put into service.
• Push back to 2032 (at the earliest) the date by which energy projects must match clean electricity and hydrogen production at an hourly level.
• Recognize energy attribute certificates from outside manufacturers’ own regions as capable of delivering electricity or natural gas into the region where the clean hydrogen production is taking place.
• Follow congressional intent and provide a more reasonable process for taxpayers to prove their food stocks are lower in carbon intensity and therefore eligible for the maximum credit.

The Biden administration’s proposed “march-in” framework would be devastating for American innovation and competitiveness and must be withdrawn immediately, according to the .

What’s going on: In December, the administration issued proposed guidelines to enable the government to “march in” and seize manufacturers’ patents if their products were developed in any part with federal dollars.

• But the move—which a bipartisan group of 28 legislators in a letter to the White House last week—would be fundamentally ruinous to manufacturing in the U.S., according to the 51�Թ���.
• “Undermining America’s world-leading patent system is a recipe for reduced innovation and significant economic damage, with a disproportionate impact on small manufacturers,” said 51�Թ��� Vice President of Domestic Policy Charles Crain.

Price controls: The proposal is tantamount to government price controls, the 51�Թ��� said.

• “If finalized, this threat to innovation would for the first time enable the government to set price controls on products that incorporate [intellectual property] from early-stage federally funded research.”
• “Manufacturers that do not comply with the proposal’s arbitrary and uncertain pricing criteria could see the government march in, seize their IP and license it to a competitor.”

Undoing advancements: Prior to the 1980 enactment of the Bayh-Dole Act, which allowed for the commercialization of federally funded research, groundbreaking discoveries “often remained stuck in the lab, as private-sector entrepreneurs and investors were unwilling to license innovative technologies given the uncertain path to commercialization,” the 51�Թ��� said.

• “Limiting manufacturers’ ability to commercialize groundbreaking innovation means that early-stage research will remain on the shelf in university labs.”

If implemented, a safety standard proposed by the Consumer Product Safety Commission for table saws will harm manufacturing in the U.S., the 51�Թ��� told the CPSC this week.

What’s going on: “The Commission’s proposed rule itself outlines that, if implemented, the cost of table saws would more than double, small manufacturers may be forced to exit the market, businesses may be unable to operate and sales of table saws will decrease,” 51�Թ��� Senior Director of Tax Policy Alex Monié said during testimony at a hearing Wednesday.

• The rule would require table saws—those motor-driven, wood-mounted, circular saw blades used daily in multiple industries to cut wood, plastic and other materials—to come equipped with patented active injury mitigation technology.
• Bringing currently on-the-market table saws into compliance could cost manufacturers from $100,000 to $700,000 per model and take up to three years, Monié said.

The background: In October 2023, the CPSC voted to issue a Supplemental Notice of Proposed Rulemaking promulgating the table saw safety guideline, in response to the petition of a company that holds more than 100 patents “related to the AIM technology the Commission would mandate,” Commissioner Peter A. Feldman fellow commissioners that month.

• There are voluntary safety standards in place for table saws, requiring modular blade-guard systems, and these “are working as the market demands,” Monié told the commissioners.

Instituting a monopoly: In addition to costing manufacturers huge sums, the proposed standard “would have the effect of instituting a monopoly, as the proposed rule is the latest in a series of Commission actions to impose a standard that could be achieved only through the use of one claimed patented technology,” Monié continued.

Unjustifiable rulemaking: Under the Consumer Product Safety Act, the CPSC cannot issue a mandatory standard unless it has found that an existing voluntary standard fails to or does not adequately prevent or reduce the risk of injury.

• “The CPSC admits that it does not have adequate data to determine that the current voluntary standard will not reduce the risk of injury,” Monié went on.

What should be done: The CPSC should withdraw the proposed standard, he said, and “readdress the cost and burden analysis in the proposed rule, with a more tailored focus on small manufacturers.”

The 51�Թ��� isn’t playing favorites in an election year. Instead, it’s redoubling its post-partisan approach to advocacy. 51�Թ��� President and CEO Jay Timmons’ message to manufacturers: the association will leverage its hard-won, bipartisan influence to advance manufacturers’ priorities, no matter who’s in charge.

• “That’s what we’re about. Policy that helps people. Policy—not politics, personality or process. That’s what will guide us in 2024 and beyond,” Timmons said in a speech that helped kick off the 51�Թ��� board meeting this week, before more than 200 of manufacturing’s leading executives in Phoenix, Arizona.

Why it’s important: “Both sides want us on their side,” Timmons emphasized while recounting a recent legislative debate. That trust and respect, he said, translates into wins: agencies modifying rules to avoid lawsuits and high-level White House officials acknowledging the impact of 51�Թ��� campaigns.

Battles loom: But the very system enabling these victories is under threat, Timmons warned, placing the onus on manufacturers to not just build products, but to empower the 51�Թ��� to utilize their voices and stories to advance policies that strengthen the economy and underpin democracy and free enterprise.

• Tax showdown: Any new taxes on manufacturers are a nonstarter, Timmons vowed, staking a claim in the looming 2025 tax fight and reiterating manufacturers’ call for immediate passage in the Senate of full capital expensing, R&D expensing and interest deductibility.
• Regulatory onslaught: From new Environmental Protection Agency air standards to the broader regulatory agenda, Timmons argued that overzealous rules impede manufacturing competitiveness. He specifically criticized the new PM2.5 standards, saying the EPA “set them at a level that is lower than the EU or the UK, and imposed a compliance timeline that is far more aggressive.”
• LNG halt: Timmons blasted the Biden administration’s liquefied natural gas export permit freeze, calling it shortsighted and detrimental to both manufacturers and broader U.S. energy and climate goals. “They want to address climate change?” he asked. “So they’re going to have other countries buying and burning dirtier energy? They want to support our allies around the world? So they’re going to force Europe and Japan and others to get their fuel from the likes of Russia?”
• Immigration deadlock: He criticized inaction on both sides of the aisle, saying border security and workforce solutions can—and must—coexist.

Opportunity ahead: Despite considerable challenges, Timmons sees an opportunity for manufacturers to take the lead in promoting American values and sound policies that fuel the industry’s strength.

• “This election year, manufacturers can help renew a shared sense of purpose,” Timmons told executives. “Remind Americans why our country—our system rooted in God-given human rights and fundamental freedom—is worth celebrating and defending.” At stake is not just the next regulatory win, but the very system that made U.S. manufacturing a global powerhouse, he said.
• America’s bicentennial celebration helped us see beyond the divisions of the day, Timmons observed. As we approach the 250th anniversary of the signing of the Declaration of Independence, “it’s manufacturers who are positioned to cultivate that patriotic spirit,” Timmons said. It’s more than just bottom lines. “We can help mend the divides—so that we can promote policy that will strengthen manufacturing in America.”

With economic challenges and “geopolitical tensions” threatening international commerce, the World Trade Organization faces a difficult job at the 13th Ministerial Conference, according to .

What’s going on: At the meeting, which began Monday in Abu Dhabi and is expected to conclude on Thursday, “[t]he WTO is hoping for progress, particularly on fishing, agriculture and electronic commerce. But big deals are unlikely as the body’s rules require full consensus among all 164 member states—a tall order in the current climate.”

• The organization could also decide on whether to expand a 2022 TRIPS waiver to include COVID-19 therapies—a move that would be damaging to manufacturing in the U.S.
• “The WTO committee in charge of discussing intellectual property rights recently told the WTO General Council that it had been unable to reach agreement on the issue after more than 18 months of discussion,” reports. “That could signal the end of the road for efforts to expand the waiver, but [there is] fear it could still be approved by ministers at MC13 as part of the final horse-trading that occurs to reach some deal.”

Reform needed: “Speaking on the first day of MC13, WTO Director-General said that ‘multilateralism is under attack,’ highlighting a need to ‘reform the multilateral trading system’ and boost international cooperation,” according to AFP.

• European Trade Commissioner Valdis Dombrovskis echoed the call for reform, saying, “The world has changed. And institutions like the WTO need to evolve too. We are faced with crises wherever we look.”��

No waiver expansion: One change that should not take place, however, is the TRIPS waiver expansion, the 51�Թ��� told U.S. lawmakers ahead of the WTO meeting. 51�Թ��� President and CEO Jay Timmons with Okonjo-Iweala and WTO Deputy Director General Angela Ellard in Geneva last March to discuss the waiver.

• “The proposed expansion of the TRIPS waiver to include diagnostics and therapeutics would jeopardize American innovation, endanger U.S. jobs, undermine future investment and research and development for lifesaving products that are fundamental to fighting global crises, including many diseases and health conditions other than COVID-19, and pose serious safety concerns,” the 51�Թ��� and six association partners told Secretary of State Antony Blinken, Commerce Secretary Gina Raimondo, U.S. Trade Representative Katherine Tai and White House Chief of Staff Jeffrey Zients last week.

Digital commerce: There are some concrete actions that should be taken regarding the WTO, the 51�Թ��� told the House Ways and Means Subcommittee on Trade this month.

• The USTR should reverse a decision it made in October 2023 to “drop the longstanding digital trade position of the U.S. at the WTO. This longstanding position, which has clear bipartisan support from the U.S. Congress, seeks to protect cross-border data flows, prohibit costly data localization requirements abroad, defend American digital products from discrimination and protect American IP.”
• And the U.S. should urge the WTO to institute a permanent e-commerce moratorium. Allowing the current “moratorium on customs duties for electronic transmissions … to expire would inject uncertainty and impose unfair burdens on manufacturers in the U.S.”

The last word: “The WTO remains a critical forum to advance free and fair trade globally,” said 51�Թ��� Director of International Policy Dylan Clement.

• “The outcome of the 13th WTO Ministerial Conference is important because an expansion to the TRIPS waiver or letting the e-commerce moratorium expire could significantly harm manufacturers in the United States. As such, manufacturers will be watching the WTO Ministerial this week very closely.”��