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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’s trade policy. The president discussed his vision for an “America First” strategy, which includes the tariffs that went into effect and .

In his words: “Deals are being made,” he said. “That’s a combination of the election win and tariffs. It’s a beautiful word, isn’t it?”

• “If you don’t make your product in America … 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’s our turn to start using them against those other countries.”
• “On average [according to the president], the European Union, China, Brazil, India, Mexico and Canada … and countless other nations charge us tremendously higher tariffs than we charge them. It’s very unfair.”
• “[On April 2,] reciprocal tariffs kick in, and whatever they tariff us, other countries, we will tariff them…If they do nonmonetary tariffs to keep us out of their market, then we will do nonmonetary barriers to keep them out of our market.”

On Canada and Mexico: “[W]e have very large deficits with both of them. … 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.”

• “Tariffs 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.”

The 17�Թ�����’s take: Ahead of the speech, 17�Թ����� President and CEO Jay Timmons pointed out in a that manufacturers—especially those with thin margins—are already feeling the pressure from new tariffs. “The stakes couldn’t be higher for manufacturers right now,” he said. The 17�Թ����� 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: “To mitigate the adverse effects of today’s tariffs,” Timmons said, “President Trump and Congress [need] to implement a that would create predictability and certainty to invest, plan and hire.”

• That strategy should include making President Trump’s 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: “Building things in America only works if we can sell them around the world,” said Timmons. He added this morning: “That’s why we’re 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.”

• “President Trump can make American manufacturing greater than ever before by negotiating a ‘zero for zero’ tariffs manufacturing trade deal with our major trading partners,” Timmons said.

Developing: This morning on , Commerce Secretary��Howard Lutnick hinted publicly that he has heard the 17�Թ����� and the industry’s urging for relief from tariffs on Canadian and Mexican imports for products that comply with the U.S.–Mexico–Canada Agreement—a signature achievement of President Trump’s first term.

White House adviser David Sacks has his work cut out for him (POLITICO Pro’s , subscription).

What’s going on: “Today, as the president’s AI and crypto czar, Sacks is tasked with opening doors for Silicon Valley and global financiers to expand AI infrastructure—and 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.”

• 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 “Stargate” project to do just that.

Interconnection, cost challenges: While the president “has promised to use emergency declarations to build more power plants” to run these data centers, “tech 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.”

• That’s because regional electric grids and utility companies are already straining to keep up with Americans’ growing power appetite, and the prospect of dramatically increasing capacity is leading to concerns about cost and reliability.

What’s next: “Under Trump’s 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’s 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.”

What we’re doing: The 17�Թ����� 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.

By deciding to imposition of tariffs he announced last weekend on Mexico and Canada, President Trump shows he’s hearing manufacturers “loud and clear,” the 17�Թ����� said yesterday.

What’s 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 ��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 “immediately supply” 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.��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: “This decision by President Trump reflects��his swift move to keep his campaign promises, balancing a��commitment��to aggressive border enforcement��with the need to keep manufacturing in the United States competitive,” 17�Թ����� Executive Vice President Erin Streeter said.

• “The 17�Թ����� 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’s success.”
• 17�Թ����� President and CEO Jay Timmons reinforced President Trump’s and the manufacturing sector’s 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, “we need to bring costs down,” Timmons told ABC. “And if you don’t have that, or you have the uncertainty of what’s coming next, manufacturers are reluctant to invest in new plants and equipment and facilities. They’re reluctant to hire new workers … raise wages or increase benefits. … Once we get all this sorted out, I think it will be good news for manufacturers,” but the sooner that happens, the better, he concluded.

• Timmons also discussed President Trump’s landmark 2020 U.S.–Mexico–Canada Agreement, which he said provided manufacturers with the certainty the sector requires.
• “The certainty that was provided by a negotiated and accepted trade agreement by the three countries enabled manufacturers to make investment decisions,” Timmons told CNBC. “Now we have more uncertainty about what’s ahead … but we assume that there is a rationale for this.”

Key statistics: The USMCA was vital in shifting key imports away from China to North America. According to a new 17�Թ����� :

• 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: “We appreciate the administration’s continued willingness to receive our data and manufacturing stories,” Streeter went on. “We will continue working with policymakers to ensure that future decisions support both national security and manufacturing’s success.”

17�Թ����� in the news: The 17�Թ�����’s advocacy received widespread attention in the media, with , , ��(���ܲ�����������پ��Dz�), , ��(���ܲ�����������پ��Dz�),����and a (subscription) article all��highlighting its statements on the impact of tariffs on manufacturers.

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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�Թ����� has urged President Trump to undo: the Biden EPA’s 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�Թ����� Vice President of Domestic Policy Chris Phalen pointed out.
• An 17�Թ�����-commissioned  by 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 “nonattainment,” 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�Թ����� 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�Թ����� in action: The 17�Թ����� is the regulation in court, alongside a number of other business associations.

President Trump will soon “ramp up” workplace immigration status checks, according to incoming border czar Tom Homan ().
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What’s going on: The incoming administration intends to increase U.S. Immigration and Customs Enforcement raids of workplaces shortly after Trump’s inauguration, Homan told NBC News late last week.

• “We’re going to do it in a smart way,” Homan said. “We’re still working on how exactly we want to roll this out, but [worksite] operations have to come back again because it’s the No. 1 place we find victims of forced labor being run by many cartels.”

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’s 287(g) program, which allows the agency to partner with local law enforcement.

Title 42: Whether the administration will reinstate Title 42—the COVID-19-era immigration restriction measure that made deportations on public health grounds easier—remains to be seen, according to Homan.

• “I don’t know whether [Trump] has made a decision, and I would not get ahead of him,” Homan told NBC News. “But I think there could be a case made for it.”

National security: Stricter immigration policies will act as a deterrent to those considering coming to the U.S. illegally, Homan continued.

• “I think the American people have spoken,” he said. “This is the No. 1 issue. They went to the voting booth. I think Congress is paying attention. They’ll give us the money to do this job. It’s not so much about illegal immigration. It’s about national security.”

Our take: “Manufacturers support a comprehensive approach to our country’s 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,” said 17�Թ����� Senior Director of Technology Policy Franck Journoud.

• “Securing the border is a crucial step toward ensuring that America’s immigration laws support safe and prosperous communities across the country.”

One of the most popular current uses of generative artificial intelligence among businesses: taking “chatbots to the next level” (, subscription).
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What’s going on: “Software 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.”

Why it’s important: If the bots work the way they’re 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–based health care company Johnson & Johnson is using the bots to help it during the new drug discovery phase.

• “Once 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. … 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.”

A caveat: J&J is optimistic about the technology’s potential but moving forward cautiously. It is still working on improving the flow of employee review of the automated agents’ output, Swanson told the Journal.

Congressman Mike Carey (R-OH-15) recently visited Armstrong World Industries’ 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’s top workplaces.

The tour: AWI’s 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��ceiling panels, which use phase-change material technology to regulate indoor temperatures and reduce HVAC energy consumption by up to 15%.

• “These panels not only help reduce energy costs but also contribute to a greener environment,” Muth explained.

Policy needs: So stressed that policymakers are essential to American manufacturers’ competitiveness, saying, “If 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.”

• “The Inflation Reduction Act’s tax incentives are essential for advancing innovative energy solutions, and technologies like our Templok��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.”

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. “Products like Templok��show the importance of supporting investment in research and development,” he said.
• So agreed, noting that tax policy has a direct impact on AWI’s ability to reinvest in new technologies and expand its operations in Hilliard. In particular, So emphasized that “tax incentives would encourage the mass adoption of new technologies like Templok,��which would create new jobs in Ohio, reduce the stress on our national electric grid and save our customers money.”

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’s contributions to the community.

The last word: “It’s essential to create an environment where companies like Armstrong can continue to thrive and provide good-paying jobs,” Rep. Carey concluded.

Washington, D.C. – Today, the 17�Թ����� voiced manufacturers’ support for efforts led by Rep. Buddy Carter (R-GA) to bring much-needed reform and transparency to pharmacy benefit managers. The 17�Թ����� 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�Թ����� Managing Vice President of Policy Chris Netram released the following statement:

“Manufacturers 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—in the lame-duck session—to increase transparency, lower health care costs and protect manufacturing workers.”

Background: Last month, the 17�Թ����� launched a urging Congress to pass PBM reform legislation this year.

The 17�Թ�����’s Q3 2024 found that 78% of small manufacturers with fewer than 50 employees cite rising health care costs as a primary business challenge—the top concern among small business respondents in the survey.

To view the 17�Թ�����’s latest digital ad, click .

-17�Թ�����-

The 17�Թ����� 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�Թ����� 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�Թ����� or to follow us on Twitter and Facebook, please visit��

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’s September interest rate cut,��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.

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��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’s 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.