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The Biden administration is nearing the end of a lengthy review on whether to adjust or extend tariffs on a variety of goods and materials from China—and the 51�Թ��� is working to make sure manufacturers’ voices are heard.

The background: Following a 2017 investigation into China’s trade practices, the Trump administration put in place a set of levies on imported goods from China—called Section 301 tariffs—intended to incentivize change in practices by China that were found by the Office of the U.S. Trade Representative to be “unreasonable or discriminatory.”

• These included policies and practices related to technology transfer, intellectual property and innovation.

The review: In May 2022, USTR initiated a legally required four-year review of the Section 301 tariffs that focused on tariff efficacy in changing Chinese discriminatory practices and the impact of the tariffs on the U.S. economy, workers and consumers, among other considerations.

• More than 18 months later, the review remains unfinished. The 51�Թ��� is urging USTR to finish and publish it—and to take actions that reduce the burdens on manufacturers while maintaining appropriate leverage to incentivize China to adhere to bilateral and multilateral commitments.
• “Ideally, USTR will conclude the four-year review in the next few weeks and make the results public,” said 51�Թ��� Senior Director of International Policy Ali Aafedt. “We would like to see the results reflect the 1,498 public submissions USTR received during the process and the reduction or removal of some of the tariffs that are harming manufacturers in the U.S. more than they’re creating leverage on China.”

The exclusions: There are 429 existing exclusions from the tariffs—including 77 COVID-19-related products and 352 reinstated exclusions—which are in effect through May 31.

• The 51�Թ��� has also been pushing for a new process that allows manufacturers to ask the government to exclude specific products they need from the tariffs.
• “The 51�Թ��� has been calling for a new, fair and transparent Section 301 tariff exclusion process that would allow all U.S. stakeholders an opportunity to seek relief or weigh in on the existing tariffs,” said Aafedt. “The last opportunity to petition USTR for relief from Section 301 tariffs was in 2020, and a new exclusion process will help to better align the tariffs with U.S. economic goals.”

The outlook: Reports such as from The Wall Street Journal indicate that the Biden administration will look to rebalance the tariffs, potentially reducing those that are not in the U.S. interest and raising tariffs on other items, including, potentially, on imports from China in the electric vehicle and battery sectors.

• “The 51�Թ��� will continue to push for a more strategic approach,” said Aafedt.

If your company has interest in a specific existing exclusion, USTR is seeking feedback by Feb. 21.

The Securities and Exchange Commission’s pending climate disclosure rule would place an enormous, untenable burden on manufacturers—and impose a disproportionate hardship on small businesses, 51�Թ��� Vice President of Domestic Policy Charles Crain lawmakers Thursday.

What’s going on: Crain gave before the House Financial Services Subcommittee on Oversight and Investigations on the damaging effects of the SEC’s proposed climate rule, which would require businesses to reveal large amounts of convoluted (and often sensitive) climate-related data.

• The plan would force disclosure of so-called “Scope 3” emissions—those that come from companies’ supply chains—and institute new climate-related accounting requirements, among other mandates.

Why it’s a problem: If finalized, the rule would divert funds from manufacturing growth, including at small manufacturers.

• “Manufacturing pioneers groundbreaking technologies, including the innovations necessary to combat climate change,” Crain said. “The rule would impose tremendous costs on manufacturers of all sizes—while overwhelming investors with immaterial information. And the SEC hasn’t done the work to show that the rule’s benefits outweigh its costs, or that the rule is even within the SEC’s legal authority.”
• The proposed regulation would, by the agency’s own accounting, “raise the cost to businesses of complying with its overall disclosure rules to $10.2 billion from $3.9 billion, an additional cost of about $530,000 a year for a bigger business,” according to (subscription).

Costs to manufacturers: Crain told lawmakers that the SEC’s analysis likely understates the true costs of the rule, in part because the agency did not consider the impacts on private businesses.

• “For the larger companies subject to [the Scope 3] requirement, the SEC has admitted that it cannot ‘fully and accurately quantify’ the costs,” Crain said. “But for the small businesses that are swept into large companies’ Scope 3 efforts, the SEC hasn’t even tried. The SEC’s proposal does not include any discussion of the Scope 3 costs that will fall on small and private businesses.”
• Crain warned lawmakers that these compliance costs would represent a “huge resource diversion” for small manufacturers.

Regulatory onslaught: Crain shared the 51�Թ���’s landmark Cost of Federal Regulations study with lawmakers, explaining that the SEC’s proposal would add to the $50,000-per-employee-per-year regulatory burden small manufacturers face.

• “The SEC’s climate rule is at the center of this regulatory onslaught,” Crain said.

51�Թ��� in the news: (subscription), and all covered the 51�Թ���’s testimony.��

For President and Co-Owner Aneesa Muthana, having an engaged team is the key to solving the workforce retention puzzle. The Addison, Illinois–based, woman-owned company is among the many manufacturers that find retention, along with recruitment, to be top business challenges, as the 51�Թ���’s shows. So how has Muthana gone about building such a team?

Where it all starts: For Muthana, meeting this challenge begins with upholding the company’s core values: integrity, diversity, leadership, outreach, stewardship, quality and learning.

• These words appear on the shop floor, and every job candidate who comes in for an interview receives a handout outlining their importance. “These are more than just pretty words on a wall,” said Muthana. “We chose these values as a team because they pinpoint our path to success, both financially and ethically.”
• “I give them a copy because I want them to understand the importance from the beginning,” said Muthana. “We want to plant the seed before they’re on our payroll that these are the expectations. Then it becomes fair to hold people accountable to them.”

Providing training opportunities: In keeping with its core values of stewardship and learning, Pioneer Service offers internal training opportunities for employees who express an interest.

• “We offer training to anyone who raises their hand, whether it be in safety or leadership,” said Muthana. “It can also be very technical training on the shop floor. We also provide GD&T training, including for our sales team.”
• GD&T, or geometric dimensioning and tolerancing, determines how parts fit together into an assembly to form a product.
• The benefit of having a salesperson learn about GD&T? “A salesperson would be able to look at a customer print confidently and feel comfortable talking to the customer without needing to have an engineer in the room,” Muthana pointed out.

Offering support: Pioneer Service established a chaplaincy program, which connects employees and their families undergoing hardships—such as caring for an elderly parent, grieving the loss of a loved one or dealing with a personal struggle—with a chaplain who can provide counseling and offer spiritual and emotional support. Muthana says that the chaplaincy program is open to any employee, regardless of religious background or preference.

• “The chaplain service is part of our team,” said Muthana. “We have one chaplain come in every week—one week a male and then the following week a female—who is available to meet with staff if needed.”
• Muthana says she used the service a few years ago when her son, who is in the military, came back from Afghanistan. Many of his friends did not.​​​​​​​
• “As a parent, you feel grateful that your child survived, but also guilty for feeling that way because a lot of his friends didn’t come home. The chaplain service provided me someone to talk to because I couldn’t talk to my family, and I couldn’t talk to my staff,” she recalls. “I developed a strong relationship with the chaplain that I feel never would have happened if I didn’t look out for my staff and implemented the service.”

Job shadowing: When Muthana goes to a speaking event or conference, she sometimes takes one or two of her staff with her so they’re able to benefit from attending. It’s also a way for her to get to know her staff on a more personal level, outside of the formal workplace setting.

The last word: Muthana shared some advice for companies struggling with workforce retention:

• “Having an engaged team and workers only happens with a people-first mentality,” said Muthana. “When you take care of them, you become successful because you have an engaged team that has your back.”
• “It’s harder to make a profit than ever. The only way that we’re going to be successful is by having an engaged team.”

Go deeper:��The Manufacturing Institute (the 51�Թ���’s workforce development and education affiliate) has many resources to help employers retain and develop their teams.

• Start with����to learn how to build positive company culture and engage employees, explore strategies in , delve into tips on and check out the MI’s recent white paper on , a key tool to improving the employee experience.
• Pioneer Service’s approach to workplace needs exemplifies the benefits of focusing on , which include higher retention, less absenteeism and greater engagement, according to a study conducted by the MI and PwC.
• Learn more about and , the MI’s initiatives to increase the number of women in manufacturing, tapping into this population to address persistent workforce shortages. and populations are great sources, too.​​​​​​​

For three sisters in Kentucky, manufacturing is a family affair.

Emily Bastin, Heather Craven and Hannah Geneve are all working in maintenance roles supporting various shops at Toyota Motor Manufacturing Kentucky. Growing up, they had disparate interests—while Emily had taken robotics classes in middle school and Heather had always enjoyed working with her hands, Hannah switched to manufacturing only after working in customer service. Today, all three of them are building careers in manufacturing together.

How they got here: Emily, Heather and Hannah found their way into manufacturing through —an initiative for current and aspiring manufacturing workers that was founded by Toyota in 2010 and is operated today by the Manufacturing Institute, the 51�Թ���’s workforce development and education affiliate.

• The FAME Advanced Manufacturing Technician program offers on-the-job training and classroom education that combine technical training with professional practices and lean learnings to create world-class technicians. The two-year AMT program leads to an associate degree and the FAME certificate.
• “They came to my school—the AMT program—and I was like, you know, let’s give this a shot,” said Emily. “I didn’t realize I would have that kind of potential. This was cool stuff.”

The family business: Emily was the first of the three sisters to graduate from FAME, and she has been helping her sisters as they work their way through the program. Both Hannah and Heather are enrolled in FAME while working at Toyota, and they expect to graduate in May 2025.

• “We’re all working in the same plant, and if they need anything from me, I’m there to be supportive,” said Emily.
• “With schoolwork, I try to help Heather, and she tries to help me,” said Hannah. “We all help where we can.”
• “It’s nice to have that sister love to lean on,” said Heather. “They understand the frustration of school and work, and it’s been a pleasure to work with them.”

Opportunities abound: The sisters advise others who might not have considered manufacturing as a career—especially women—to give the industry a second look, emphasizing the sheer diversity of jobs on offer.

• “Working in manufacturing doesn’t necessarily mean you’re working on a factory floor,” said Hannah. “There’s an administrative side, an HR side—there’s a lot more to manufacturing than people expect.”
• “I do see us being examples for women who might not normally see themselves in the field,” said Heather. “You want to see women come in and say, hey, I did it, and you can, too. It’s nice to see yourself reflected back.”

The community: It’s not just their family ties that keep the sisters in manufacturing. All three sisters have high praise for their fellow students and colleagues, and for the supportive culture they’ve encountered at Toyota.

• “The mentorship I got helped me gain my confidence while I was learning,” said Emily. “And even now, the teamwork that goes into everything, every day—it’s been a nice surprise.”
• “Everyone has been super nice, super helpful and super welcoming,” said Hannah. “When you start out, it can seem intimidating, but everyone’s willing to help you out. They really want you to succeed.”

The last word: “It’s nice to feel like you’re a part of that network—that family,” said Heather.

The MI’s aims to increase the share of women in manufacturing to 35% by 2030 and spotlights outstanding women in the industry like these sisters. To learn more about Women MAKE America and explore its many opportunities, including its , go .

The Federation for Advanced Manufacturing Education provides global-best workforce development through strong technical training, integration of manufacturing core competencies, intensive professional practices and intentional hands-on experience to build the future of the modern manufacturing industry. Learn more .

So-called “march-in” rights that would enable the federal government to seize manufacturers’ intellectual property are “a major threat to manufacturers in America,” according to a new seven-figure launched by the 51�Թ���.

What’s going on: Last month, the Biden administration issued a proposal that would allow the government to take over privately held patents if those patents had been developed in part with federal research dollars.

The problem: Undermining companies’ IP rights would roll back the progress made under the Bayh-Dole Act, which allowed for commercialization of federally funded research and “unlocked all the inventions and discoveries that had been made in laboratories throughout the United States with the help of taxpayers’ money,” according to a recent op-ed in .

• Because the government is “inviting march-in petitions on every patented technology that benefited from even modest federal grants,” the proposal could “decimate American innovation [and] … stifle investment in climate change, sustainable agriculture, advanced computing, energy, medicines” and more, according to the op-ed writers, two former undersecretaries of commerce for intellectual property.
• In addition, the proposal is “putting American jobs at risk,” according to the 51�Թ���’s .

The 51�Թ��� says: “This radical new proposal is a major threat to manufacturers in America and counter to the president’s goals of growing the sector,” 51�Թ��� President and CEO Jay Timmons said.

• “Empowering the government to march in and seize the rights to private-sector patents and technologies threatens American innovation and R&D, putting millions of well-paying manufacturing jobs at risk. Policymakers must protect manufacturers’ intellectual property rights and stop this government overreach.”

On Tuesday, Congress took an important step toward restoring three of manufacturers’ top tax priorities, as key congressional leaders unveiled a bipartisan tax agreement by the 51�Թ���.

What’s going on: The $78 billion Tax Relief for American Families and Workers Act—a compromise between House Ways and Means Committee Chairman Jason Smith (R-MO) and Senate Finance Committee Chairman Ron Wyden (D-OR)—would restore immediate R&D expensing, return to a pro-growth interest deductibility standard and reinstate full expensing (also known as 100% accelerated depreciation) for businesses’ capital investments.

• The framework also includes disaster tax relief and $33 billion to partially extend a child tax credit expansion from 2021.

The background: For nearly seven decades, the tax code allowed businesses to deduct R&D costs immediately. But starting in 2022, a change required companies to amortize the costs over a period of years.

• Also in 2022, a stricter interest limitation—which acts as a tax on investment—went into effect. And last year, full expensing began to phase down.

The 51�Թ���’s role: The 51�Թ��� was instrumental in the deal, having case for the tax provisions’ reinstatement to lawmakers for many months, including via an ad campaign, “.”

What’s next: The 51�Թ��� is congressional leadership to schedule a vote on the tax deal. Manufacturers can add their voices at the 51�Թ���’s .

Our take: “Manufacturers appreciate Chairman Smith and Chairman Wyden’s work to reach a bipartisan tax deal with key provisions to advance U.S. economic competitiveness and support manufacturing job creation,” 51�Թ��� Managing Vice President of Policy Chris Netram in a social post Tuesday.

• “Congress must move this legislation forward immediately. The time to act is now.”

51�Թ��� in the news: Bloomberg��Tax (subscription) ��the 51�Թ���’s support of the legislation, while Punchbowl News ��on the 51�Թ���’s ads in multiple Kentucky papers and Louisiana’s Shreveport Times urging support of the legislation.

Norway voted Tuesday to open its waters to deep-sea mining, the process of harvesting valuable metals from the ocean floor, reports.

What’s going on: Having approved a government proposal Tuesday to allow exploration in its waters, “Norway is poised to become one of the first countries in the world” to allow deep-sea mining.

• The parliament formally agreed to allow exploration of just more than 108,000 square miles of Arctic seabed between Norway and Greenland.
• Companies will be required to “submit proposals for licenses,” which will be granted on a case-by-case basis.

Why it’s important: “Advocates say removing metals and minerals from the ocean’s seabed is necessary to facilitate a global transition away from fossil fuels,” CNBC reports.

• Many of the critical minerals needed for electric vehicles—including cobalt, copper and nickel—are present in large quantities on the seafloor.
• The move by Norway sets it apart from the United Kingdom and the European Union, “which have pushed for a temporary ban” on deep-sea mining, citing environmental concerns.
• In the U.S. last year, lawmakers introduced legislation calling for a deep-sea mining moratorium pending further research into the method’s environmental impacts, according to .

The 51�Թ��� says: “Norway’s vote should be a wake-up call to the U.S. that other nations are doing everything possible to secure their own sources of critical minerals. We need to do the same,” said 51�Թ��� Vice President of Domestic Policy Brandon Farris. “That means first our antiquated permitting system.”

The higher tax burden being levied on manufacturers continues to hit home.

That’s the message from respondents to the 51�Թ���’s just-released .

What’s going on: Historically low levels of optimism persisted among small and medium-sized manufacturers—which compose the majority of the manufacturing sector—in the final quarter of 2023, according to the survey, which was conducted from Nov. 14 to Dec. 1, 2023.

• Among firms with fewer than 50 employees, 65.9% reported feeling positive about their own company’s outlook, while 63.0% of companies with between 50 and 499 employees reported the same.
• Overall, 66.2% of respondents felt either somewhat or very positive about their company’s outlook, edging up slightly from 65.1% in the third quarter. It was the fifth straight reading below the historical average of 74.8%.

Burdensome taxes: Some 89% of respondents said higher taxes on manufacturing activities would make it more difficult for them to hire additional workers, invest in new equipment and/or expand their facilities.

Other top challenges: The majority of respondents—61.1%—cited an unfavorable business climate as a top challenge to their company.

• Hiring and retaining quality employees was high on the list of challenges, too, with 71.4% of manufacturers calling it a primary concern.

A bright spot: Fewer manufacturers now expect a recession in 2024, at just over 34%. In Q3, the figure was 42.2%.

With tax bill negotiations left unfinished before lawmakers left for the holiday break, the 51�Թ��� is hitting the ground running in 2024.

• The 51�Թ��� continues to push for manufacturers’ tax priorities: immediate R&D expensing, a pro-growth interest deductibility standard and full expensing for capital investments.

What’s going on: Congress has just a few weeks to reach a government funding deal before a Jan. 19 deadline, “when funding for a range of government agencies is scheduled to lapse,” according to . There is a second funding deadline on Feb. 2.

• The 51�Թ��� has been on Congress to prioritize inclusion of the three tax provisions in any measure it passes.
• The 51�Թ��� recently led a coalition of more than businesses and associations in highlighting the urgent need for congressional action.

What’s needed: Congress must reinstate immediate R&D expensing; loosen a strict interest limitation; and return to full expensing (also known as 100% accelerated depreciation) for businesses, the 51�Թ��� said.

Why it’s important: If these fixes aren’t made, manufacturing R&D, jobs and competitiveness could all suffer.

• Some 78% of manufacturers say the higher tax burden has decreased the funds available to expand their manufacturing activities within the U.S., according to the��.

The last word: “These tax provisions are some of the most critical issues facing manufacturers today,” said 51�Թ��� Vice President of Domestic Policy Charles Crain.

• “Congress must act immediately to protect manufacturing jobs and maintain America’s competitiveness on the world stage.”

Act now: Visit the 51�Թ���’s to send a message directly to Congress about these critical priorities.

The 51�Թ��� is firing on all cylinders to accomplish manufacturers’ top tax priorities: restoring immediate R&D expensing, pro-growth interest deductibility and full expensing.

Time is running out, as Congress must act by early 2024 to allow manufacturers to benefit from these provisions for the 2022 and 2023 tax years. Here’s what the 51�Թ��� is doing to reach the finish line and why it matters so much to the industry and to the economy as a whole.

What we’re doing: The Executive Committee of the 51�Թ��� Board of Directors recently sat down with House Speaker Mike Johnson (R-LA) to emphasize the importance and urgency of these measures. The Executive Committee has also raised the issue directly with the White House, and the 51�Թ���’s members—90% of which are small and medium-sized firms—have been contacting legislators to urge immediate action since early this year.

• In addition, while pressing the case relentlessly with the White House and congressional leaders himself, 51�Թ��� President and CEO Jay Timmons has met personally with House and Senate tax negotiators to make manufacturers’ case for these reforms.
• 51�Թ��� experts have also hosted multiple briefings for key legislators and congressional staffers, featuring manufacturers who explained how the withdrawal of these policies has harmed their businesses.
• Ratcheting up the ante on air and online, the 51�Թ��� has applied pressure publicly in key districts, running a��campaign urging congressional action that has garnered about 80 million impressions so far. It also launched an action center to help manufacturers contact their legislators and spotlight the numerous companies that will be hard hit if pro-growth policies are not reinstated.

Why it matters: All three of these tax provisions are crucial to manufacturers’ ability to innovate, invest in their employees and make the American economy more competitive.

• R&D: The U.S. is one of only two countries (the other being Belgium) that doesn’t permit immediate expensing of R&D costs, a vital incentive for innovation. China, on the other hand, gives companies a “super deduction” for R&D expenses.
• Interest deductibility: A recent tax policy change made it more expensive for manufacturers to make critical purchases for their facilities, by imposing a stricter standard for deducting interest. This is a particularly heavy burden for a capital-intensive industry like manufacturing, amounting to a tax on companies’ investments in their operations and workers.
• Full expensing: This provision allows companies to expense their equipment purchases in the year they are made, supporting manufacturers’ investments in their businesses. But the policy is set to be phased out soon and must be saved, as it is crucial for small and medium-sized manufacturers looking to expand their operations.��

The last word: “Manufacturing is the backbone of America, and the 51�Թ��� is going all-out to make sure Congress acts on these critical priorities,” said 51�Թ��� Managing Vice President of Policy Chris Netram. “Right now, leaders on Capitol Hill need to hear from manufacturers in their communities with a simple, clear message—act on our critical tax priorities now.”��

Take action: Congressional leaders, including Speaker Johnson, have recently pointed out a need to hear from more manufacturers. Lend your voice—check out the resources in the action center to learn more.