President Trump Cements Tariffs as a Fixture of Trade Policy
In his first address to Congress in his second term, President Trump made it clear that tariffs are not just a temporary tool, but a fixture of his administration鈥檚 trade policy. The president discussed his vision for an 鈥淎merica First鈥 strategy, which includes the tariffs that went into effect and .
In his words: 鈥淒eals are being made,鈥 he said. 鈥淭hat鈥檚 a combination of the election win and tariffs. It鈥檚 a beautiful word, isn鈥檛 it?鈥
- 鈥淚f you don鈥檛 make your product in America 鈥 you will pay a tariff and, in some cases, a rather large one. Other countries have used tariffs against us for decades, and now it鈥檚 our turn to start using them against those other countries.鈥
- 鈥淥n average [according to the president], the European Union, China, Brazil, India, Mexico and Canada 鈥 and countless other nations charge us tremendously higher tariffs than we charge them. It鈥檚 very unfair.鈥
- 鈥淸On April 2,] reciprocal tariffs kick in, and whatever they tariff us, other countries, we will tariff them鈥f they do nonmonetary tariffs to keep us out of their market, then we will do nonmonetary barriers to keep them out of our market.鈥
On Canada and Mexico: 鈥淸W]e have very large deficits with both of them. 鈥 We pay subsidies to Canada and to Mexico of hundreds of billions of dollars. And the United States will not be doing that any longer. We are not going to do it any longer.鈥
- 鈥淭ariffs are about making America rich again and making America great again, and it is happening, and it will happen rather quickly. There will be a little disturbance, but we are OK with that.鈥
The 17吃瓜在线鈥檚 take: Ahead of the speech, 17吃瓜在线 President and CEO Jay Timmons pointed out in a that manufacturers鈥攅specially those with thin margins鈥攁re already feeling the pressure from new tariffs. 鈥淭he stakes couldn鈥檛 be higher for manufacturers right now,鈥 he said. The 17吃瓜在线 highlighted some examples after the tariffs went into effect yesterday from both small and large manufacturers:
- A power-engineering manufacturer faces $25 million in additional costs from the Mexico tariffs alone, impacting the ability to supply U.S. utilities and industrial customers.
- A major consumer goods manufacturer is looking at $231 million new costs from tariffs from Mexico and Canada.
- A small copper manufacturer was forced to turn back 388,000 pounds of copper at the Canadian border when tariffs took effect, with future imports costing an extra $50,000 per truckload.
Comprehensive manufacturing strategy: 鈥淭o mitigate the adverse effects of today鈥檚 tariffs,鈥 Timmons said, 鈥淧resident Trump and Congress [need] to implement a that would create predictability and certainty to invest, plan and hire.鈥
- That strategy should include making President Trump鈥檚 2017 tax reforms permanent and more competitive, securing regulatory certainty, expediting permitting reform to unleash American energy dominance and key manufacturing projects, increasing the talent pool and implementing a commonsense trade policy, Timmons added.
- In recent weeks, including with the , Timmons has been raising the alarm on the need to move now on preserving and extending the 2017 tax reforms in the face of the uncertainty and price pressures.
The bottom line: 鈥淏uilding things in America only works if we can sell them around the world,鈥 said Timmons. He added this morning: 鈥淭hat鈥檚 why we鈥檙e urging President Trump and Congress to provide greater predictability with a phase-in period for manufacturers to adjust to new trade realities, while also establishing clear exemptions for critical inputs, enabling reciprocity in manufacturing trade.鈥
- 鈥淧resident Trump can make American manufacturing greater than ever before by negotiating a 鈥榸ero for zero鈥 tariffs manufacturing trade deal with our major trading partners,鈥 Timmons said.
Developing: This morning on , Commerce Secretary听Howard Lutnick hinted publicly that he has heard the 17吃瓜在线 and the industry鈥檚 urging for relief from tariffs on Canadian and Mexican imports for products that comply with the U.S.鈥揗exico鈥揅anada Agreement鈥攁 signature achievement of President Trump鈥檚 first term.
AI Faces Energy Challenges
White House adviser David Sacks has his work cut out for him (POLITICO Pro鈥檚 , subscription).
What鈥檚 going on: 鈥淭oday, as the president鈥檚 AI and crypto czar, Sacks is tasked with opening doors for Silicon Valley and global financiers to expand AI infrastructure鈥攁nd fast. But that presents Sacks with a wholly unfamiliar challenge: ensuring the tech industry gets the electricity it needs for a massive buildout of data centers to house the computing power needed for AI technology.鈥
- Technology giants including Amazon have pledged to spend billions on AI infrastructure to construct those data centers. In January, Trump and two tech firm leaders announced the $500 billion 鈥淪targate鈥 project to do just that.
Interconnection, cost challenges: While the president 鈥渉as promised to use emergency declarations to build more power plants鈥 to run these data centers, 鈥渢ech companies that want to erect their own power plants will wrestle with the limited supply of ready transformers and the real-world challenges of putting up a large gas-fired power station or tying into a nuclear reactor.鈥
- That鈥檚 because regional electric grids and utility companies are already straining to keep up with Americans鈥 growing power appetite, and the prospect of dramatically increasing capacity is leading to concerns about cost and reliability.
What鈥檚 next: 鈥淯nder Trump鈥檚 executive order, Sacks will work alongside policy staffers on science and technology, national security, economic policy and other relevant departments to craft an AI action plan. … Some direction could come from Trump鈥檚 National Energy Council, set to be led by Interior Secretary Doug Burgum. That council is likely to consider steps to streamline permitting and to unleash more fossil fuel production and other energy sources like nuclear and geothermal.鈥
What we鈥檙e doing: The 17吃瓜在线 has long Congress to take steps to facilitate the construction of data centers, including:
- Reforming the U.S. permitting system;
- Ensuring energy affordability;
- Expediting licensing;
- Addressing shortages of components;
- Mitigating cybersecurity risks; and
- Bolstering workforce development efforts.
Mexico, Canada Tariffs Paused
By deciding to imposition of tariffs he announced last weekend on Mexico and Canada, President Trump shows he鈥檚 hearing manufacturers 鈥渓oud and clear,鈥 the 17吃瓜在线 said yesterday.
What鈥檚 going on: Two days after signing executive orders under the International Emergency Economic Powers Act to add new levies on goods from Mexico, Canada and China, President Trump 听a one-month pause yesterday on the 25% tariff on Mexican goods and the 25% tariff on Canadian goods, including the 10% levy on energy products.
- President Trump, who had cited illegal immigration and the flow of illicit drugs into the U.S. as the impetus for the new tariffs, Mexican President Claudia Sheinbaum agreed Monday morning to 鈥渋mmediately supply鈥 10,000 Mexican National Guard troops to the border.
- The announcement about the tariffs on goods from Canada came following an afternoon phone call between President Trump and Canadian Prime Minister Justin Trudeau.
- The 10% additional tariff applying to products from China went into effect today.听In response, China announced retaliatory tariffs on certain goods imported from the U.S., as well as additional restrictions on critical minerals exports to the U.S. (, subscription).
Staying competitive: 鈥淭his decision by President Trump reflects听his swift move to keep his campaign promises, balancing a听commitment听to aggressive border enforcement听with the need to keep manufacturing in the United States competitive,鈥 17吃瓜在线 Executive Vice President Erin Streeter said.
- 鈥淭he 17吃瓜在线 has worked closely with the administration, ensuring that the voices of manufacturers were heard loud and clear. Throughout the weekend, we engaged directly with senior officials, providing key data and real-world industry perspectives. Our efforts helped underscore the risks of broad-based tariffs and the importance of North American supply chains to manufacturing鈥檚 success.鈥
- 17吃瓜在线 President and CEO Jay Timmons reinforced President Trump鈥檚 and the manufacturing sector鈥檚 priorities in interviews Monday with and , as well as in a cited by the Wall Street Journal board.
Certainty needed: For manufacturing in the U.S. to thrive, 鈥渨e need to bring costs down,鈥 Timmons told ABC. 鈥淎nd if you don鈥檛 have that, or you have the uncertainty of what鈥檚 coming next, manufacturers are reluctant to invest in new plants and equipment and facilities. They鈥檙e reluctant to hire new workers 鈥 raise wages or increase benefits. 鈥 Once we get all this sorted out, I think it will be good鈥痭ews鈥痜or manufacturers,鈥 but the sooner that happens, the better, he concluded.
- Timmons also discussed President Trump鈥檚 landmark 2020 U.S.鈥揗exico鈥揅anada Agreement, which he said provided manufacturers with the certainty the sector requires.
- 鈥淭he certainty that was provided by a negotiated and accepted trade agreement by the three countries enabled manufacturers to make investment decisions,鈥 Timmons told CNBC. 鈥淣ow we have more uncertainty about what鈥檚 ahead 鈥 but we assume that there is a rationale for this.鈥
Key statistics: The USMCA was vital in shifting key imports away from China to North America. According to a new 17吃瓜在线 :
- Fully one-third of all U.S. manufacturing inputs come from Canada and Mexico;
- Some 70% of what we import from Canada and nearly 60% of imports from Mexico are capital equipment, industrial supplies and automotive parts that go into further manufacturing in the U.S.; and
- The value of U.S. imports of manufacturing materials from North America is now three times greater than the value of materials coming from China.
The bottom line: 鈥淲e appreciate the administration鈥檚 continued willingness to receive our data and manufacturing stories,鈥 Streeter went on. 鈥淲e will continue working with policymakers to ensure that future decisions support both national security and manufacturing鈥檚 success.鈥
17吃瓜在线 in the news: The 17吃瓜在线鈥檚 advocacy received widespread attention in the media, with , , 听(蝉耻产蝉肠谤颈辫迟颈辞苍), , 听(蝉耻产蝉肠谤颈辫迟颈辞苍),听听and a (subscription) article all听highlighting its statements on the impact of tariffs on manufacturers.
- Its positions were also mentioned on听鈥,鈥澨,听 听补苍诲听
The Story of One Reg: PM2.5
The recission of every harmful regulation will look different, as will any subsequent legal challenges. Here is one potential scenario for a crucial regulation that the 17吃瓜在线 has urged President Trump to undo: the Biden EPA鈥檚 overly strict air quality standards.
The background: In February 2024, the EPA the standard for particulate matter, or PM2.5, in its National Ambient Air Quality Standards rule by 25%, down from 12 micrograms per cubic meter of air to nine.
- This reduction put the level of acceptable particulates at almost the equivalent of the level found in nature, as 17吃瓜在线 Vice President of Domestic Policy Chris Phalen pointed out.
- An 17吃瓜在线-commissioned鈥痓y Oxford Economics found that a standard at this level could reduce GDP by nearly $200 billion and cost as many as 1 million jobs through 2031.
- Furthermore, the new rule put huge swaths of the country in 鈥渘onattainment,鈥 meaning that they would not meet ambient air quality standards and would have to cease operating.
What could happen: The rule has not taken effect due to the current lack of compliance requirements. However, it will take the Trump administration some time to achieve a recission, which will have to begin with a Notice of Proposed Rulemaking to solicit public comments.
What the EPA should do: The EPA decided against lowering the air quality standard in 2020, but the Biden administration pushed through this change anyway, without the scientific support required by the Clean Air Act.
- The 17吃瓜在线 is asking the Trump administration to reverse course by instituting an NPRM and doing the appropriate research and consideration of public comment to develop a more reasonable standard.
17吃瓜在线 in action: The 17吃瓜在线 is the regulation in court, alongside a number of other business associations.
Trump to Revive ICE Workplace Raids
President Trump will soon 鈥渞amp up鈥 workplace immigration status checks, according to incoming border czar Tom Homan ().
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What鈥檚 going on: The incoming administration intends to increase U.S. Immigration and Customs Enforcement raids of workplaces shortly after Trump鈥檚 inauguration, Homan told NBC News late last week.
- 鈥淲e鈥檙e going to do it in a smart way,鈥 Homan said. 鈥淲e鈥檙e still working on how exactly we want to roll this out, but [worksite] operations have to come back again because it鈥檚 the No. 1 place we find victims of forced labor being run by many cartels.鈥
Funds needed: ICE has a $230 million budget shortfall, which the Trump administration plans to address by requesting more funding from Congress.
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Other ideas: The new administration is considering additional actions, Homan said, including:
- Tripling the number of beds in detention facilities, from 34,000 to at least 100,000;
- Creating a hotline people can call to report undocumented immigrants they believe have committed crimes;
- Holding weekly press conferences with updates on deportations; and
- Potentially expanding ICE鈥檚 287(g) program, which allows the agency to partner with local law enforcement.
Title 42: Whether the administration will reinstate Title 42鈥攖he COVID-19-era immigration restriction measure that made deportations on public health grounds easier鈥攔emains to be seen, according to Homan.
- 鈥淚 don鈥檛 know whether [Trump] has made a decision, and I would not get ahead of him,鈥 Homan told NBC News. 鈥淏ut I think there could be a case made for it.鈥
National security: Stricter immigration policies will act as a deterrent to those considering coming to the U.S. illegally, Homan continued.
- 鈥淚 think the American people have spoken,鈥 he said. 鈥淭his is the No. 1 issue. They went to the voting booth. I think Congress is paying attention. They鈥檒l give us the money to do this job. It鈥檚 not so much about illegal immigration. It鈥檚 about national security.鈥
Our take: 鈥淢anufacturers support a comprehensive approach to our country鈥檚 immigration challenges, both to ensure that they have the workforce they need to support economic growth and to enforce our laws and secure our border,鈥 said 17吃瓜在线 Senior Director of Technology Policy Franck Journoud.
- 鈥淪ecuring the border is a crucial step toward ensuring that America鈥檚 immigration laws support safe and prosperous communities across the country.鈥
Business Looks to AI Chatbots for Boost
One of the most popular current uses of generative artificial intelligence among businesses: taking 鈥渃hatbots to the next level鈥 (, subscription).
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What鈥檚 going on: 鈥淪oftware companies from Salesforce to ServiceNow, Microsoft and Workday last year all announced their own AI agents, which they say can help businesses be even more hands-off in areas like recruiting employees, contacting potential sales leads, creating marketing content and managing their information technology.鈥
Why it鈥檚 important: If the bots work the way they鈥檙e expected to, they could finally yield the return on investment the business world has been seeking.
- The technology is being used for chatbots in everything from manufacturing to finance and ecommerce.
AI agents in manufacturing: New Jersey鈥揵ased health care company Johnson & Johnson is using the bots to help it during the new drug discovery phase.
- 鈥淥nce a promising pharmaceutical molecule has been identified, according to Chief Information Officer Jim Swanson, it needs to be measured for its cost effectiveness and reliability. 鈥 The solution: an autonomous AI agent that can determine the best time to conduct a solvent switch, a process where one solvent is swapped for another to crystallize a molecule and actually create the drug, Swanson said.鈥
A caveat: J&J is optimistic about the technology鈥檚 potential but moving forward cautiously. It is still working on improving the flow of employee review of the automated agents鈥 output, Swanson told the Journal.
Rep. Carey Talks Tax, Innovation at Armstrong World Industries
Congressman Mike Carey (R-OH-15) recently visited Armstrong World Industries鈥 Hilliard, Ohio, facility to talk about innovations and tax policies critical to the manufacturing sector with company leaders, employees and local officials. Ohio Business Magazine recently recognized the Hilliard plant, which employs 175 workers, as one of the state鈥檚 top workplaces.
The tour: AWI鈥檚 Senior Vice President and General Counsel Austin So and Plant Manager Dave Muth took Rep. Carey on a tour of the plant, showcasing their energy-saving ceiling products for commercial spaces.
- Rep. Carey also met with longtime employees on the shop floor, some of whom have worked at the facility for more than 30 years.
Appreciating innovation: During the visit, AWI highlighted their innovative Templok听ceiling panels, which use phase-change material technology to regulate indoor temperatures and reduce HVAC energy consumption by up to 15%.
- 鈥淭hese panels not only help reduce energy costs but also contribute to a greener environment,鈥 Muth explained.
Policy needs: So stressed that policymakers are essential to American manufacturers鈥 competitiveness, saying, 鈥淚f we want U.S. manufacturing to stay ahead internationally, we need policies that encourage innovation and allow companies like AWI to thrive here at home.鈥
- 鈥淭he Inflation Reduction Act鈥檚 tax incentives are essential for advancing innovative energy solutions, and technologies like our Templok听panels should be included among the products covered by the 48E tax credit. These incentives not only help reduce carbon emissions and energy costs but also strengthen U.S. manufacturing competitiveness by supporting groundbreaking technologies.鈥
Tax priorities: Rep. Carey, So and Muth also discussed upcoming tax opportunities and challenges, especially with the impending expiration of provisions in the 2017 Tax Cuts and Jobs Act.
- Rep. Carey emphasized the importance of restoring full R&D expensing to ensure manufacturers can continue to innovate. 鈥淧roducts like Templok听show the importance of supporting investment in research and development,鈥 he said.
- So agreed, noting that tax policy has a direct impact on AWI鈥檚 ability to reinvest in new technologies and expand its operations in Hilliard. In particular, So emphasized that 鈥渢ax incentives would encourage the mass adoption of new technologies like Templok,听which would create new jobs in Ohio, reduce the stress on our national electric grid and save our customers money.鈥
Strengthening community ties: Former Ohio TV anchor Chase Evans from the City of Hilliard joined the visit, reinforcing the importance of manufacturing to the local economy and praising AWI鈥檚 contributions to the community.
The last word: 鈥淚t鈥檚 essential to create an environment where companies like Armstrong can continue to thrive and provide good-paying jobs,鈥 Rep. Carey concluded.
17吃瓜在线 Backs Bipartisan Calls for PBM Reform During Lame Duck
Congress Must Act Immediately to Rein in PBMs
Washington, D.C. 鈥 Today, the 17吃瓜在线 voiced manufacturers鈥 support for efforts led by Rep. Buddy Carter (R-GA) to bring much-needed reform and transparency to pharmacy benefit managers. The 17吃瓜在线 is a champion for PBM reform given that these underregulated middlemen drive up health care costs for manufacturers and manufacturing workers.
Following a press conference hosted by Rep. Carter to announce a bipartisan effort with dozens of members of Congress to push for PBM reform in the lame-duck session of Congress, 17吃瓜在线 Managing Vice President of Policy Chris Netram released the following statement:
鈥淢anufacturers and manufacturing workers are facing increasing and unsustainable health care costs as a direct result of PBMs. Manufacturers agree with Rep. Carter and the bipartisan, bicameral members of Congress calling for reform: Congress must act urgently鈥攊n the lame-duck session鈥攖o increase transparency, lower health care costs and protect manufacturing workers.鈥
Background: Last month, the 17吃瓜在线 launched a urging Congress to pass PBM reform legislation this year.
The 17吃瓜在线鈥檚 Q3 2024 found that 78% of small manufacturers with fewer than 50 employees cite rising health care costs as a primary business challenge鈥攖he top concern among small business respondents in the survey.
To view the 17吃瓜在线鈥檚 latest digital ad, click .
-17吃瓜在线-
The 17吃瓜在线 is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs nearly 13 million men and women, contributes $2.91 trillion to the U.S. economy annually and accounts for 53% of private-sector research and development. The 17吃瓜在线 is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the 17吃瓜在线 or to follow us on Twitter and Facebook, please visit听
Small Business Optimism Index Rises in October
The rose 2.2 points in October to 93.7, marking the 34th consecutive month below the 50-year average of 98. Meanwhile, the Uncertainty Index rose seven points to 110, the highest reading ever recorded. This high level of uncertainty is making small business owners hesitant to invest in capital and inventory, with 54% of owners reporting capital outlays in October and a net 9% of owners reporting inventory reductions compared to gains. However, uncertainty is expected to fall with the election over.
Although price increases have slowed in recent months, inflation is the top concern for small business owners, with 23% identifying higher input and labor costs as their primary issue. Filling job openings continues to be a top issue for small businesses. In October, 35% of small business owners reported jobs they could not fill, up 1% from September.
A net 26% of small business owners planned price hikes in October, up 1% from the month prior. A net 31% of small business owners reported raising compensation, down one point from September and the lowest reading since April 2021. Following the Federal Reserve鈥檚 September interest rate cut,听a net 5% of owners reported paying a higher rate on their most recent loan, down 7 points from September and the lowest reading since January 2022. Profitability remained under pressure, mainly due to weaker sales.
The outlook for general business conditions remains negative but has improved significantly from earlier in the year. While small business owners are still facing unprecedented economic adversity, owners remain hopeful as they head toward the holiday season.
New York State Manufacturing Activity Jumps in November
state grew significantly across most indices in November, with the headline general business conditions index rising 43.1 points to 31.2, the highest reading since December 2021. The new orders index increased to 28.0, rising 38.2 points, and the shipments index grew 35.2 points to 32.5, reflecting sharp increases in both. Unfilled orders fell to -10.3, while inventories improved from -7.5 to 1.0. Delivery times lengthened slightly, while supply worsened to -4.1.
Despite the sharp increase in business activity, employment decreased slightly, with the index for the number of employees falling to 0.9 from 4.1. The average employee workweek听improved some, from 4.7 to 6.1, signaling a slight increase in hours worked. Input and selling price diverged, as reflected in the prices paid index falling 1.2 points to 27.8 and the prices received index moving up 1.6 points to 12.4, which means some cost improvement for manufacturers that have been operating in a weakened pricing environment.
Although expectations for future business activity decreased 5.5 points to 33.2 after the previous month鈥檚 index hit a multiyear high (38.7), firms continue to feel optimistic about the future. The capital spending index also continued to increase, rising 3.7 points to 13.4 in November.