Archive for the ‘Trade Policy’ Category

« Older Entries

Has the 119th Congress Passed Legislation to Help Rebuild American Manufacturing?

Tuesday, January 20th, 2026

should pass that fulfills their campaign promise to support President’s Trump goal to Make America Great Again and help rebuild American manufacturing.  This article will examine whether or not Congress passed any of the legislation I recommended.

Impose a Market Access Charge (MAC) as proposed by Dr. John R Hansen, (PhD economist and  Economic Advisor, The World Bank (retd.)  “forcing foreigners to pay a market access charge (MAC) on inflows of all foreign-source money.”

The answer is still “no” as revealed in my article, “Why a Market Access Charge Would Have Greater Benefits Than Tariffs,” dated December 12, 2025. The passage of such a bill would address the problem of the U.S. dollar competing against the undervalued currencies of China, Vietnam, Korea, and Japan.  It would moderate the gross inflows of “trash cash” into the speculative financial market of stocks and bonds and help American products be more competitive in the global marketplace, which would grow our manufacturing industry and create more higher paying jobs.

Pass a Patent Reform Bill to restore inventors’ rights and end abuses by the Patent Trial and Appeal Board (PTAB). 

As revealed in my November  18, 2025 article, “Legislation Protecting Inventors’ Rights Reintroduced to Congress,” the answer is “yes” as the Restoring America’s Leadership in Innovation Act (RALIA) (H.R. 5811) was introduced in the 119th Congress by Rep. Thomas Massie (R-KY) with Rep. Marcy Kaptur (D-OH) as a key co-lead, with its text filed on October 24, 2025, aiming to overhaul U.S. patent law, including abolishing the PTAB and restoring “first to invent” standards.

Revoke China’s Most Favored Nation Status (aka Permanent Normal Trade Relations (PNTR)

The answer is “no.” The 119th Congress has not yet revoked China’s Permanent Normal Trade Relations (PNTR), but several bipartisan bills have been introduced: H.R. 694, The Restoring Trade Fairness Act, introduced on January 23, 2025 by Rep. John Molenaar (R-MI) and S. 206, The Restoring Trade Fairness Act, introduced by Sen. Tom Cotton (R-AR) on January 23, 2025.

These bills represent a  bipartisan effort to end China’s PNTR, applying Column 2 tariff rates (minimum 35%, strategic goods 100%) and eliminating duty-free de minimis treatment on small shipments. These bills are stalled in their respective committees in the House and Senate.

Reduce the Allowed Value of De Minimis imports

No, Congress hasn’t enacted legislation, but  a White House Fact Sheet states that on April 2, 2025, “President Trump is ending duty-free de minimis treatment for covered goods from the People’s Republic of China (PRC) and Hong Kong starting May 2, 2025.”

“All relevant postal items containing goods that are sent through the international postal network that are valued at or under $800 and that would otherwise qualify for the de minimis exemption are subject to a duty rate of either 30% of their value or $25 per item (increasing to $50 per item after June 1, 2025).”

Them, on July 31, 2025, President Trump signed an executive order suspending duty-free de minimis treatment for low-value shipments. “Effective August 29, imported goods sent through means other than the international postal network that are valued at or under $800 and that would otherwise qualify for the de minimis exemption will be subject to all applicable duties.”

Executive Orders may be revoked by subsequent presidents, so it is important that Congress passes legislation to permanently suspend duty-free de minimis treatment for low-value shipments.

Both :  H.R. 694 the Restoring Trade Fairness Act and S. 206 The Restoring Trade Fairness Act, mentioned above would permanently suspend duty-free de minimis treatment for low-value shipments in addition to revoking China’s PNTR status.  It is important that these bills be approved by their committees to be voted on by the House and Senate.

Reauthorize a Reformed Tax Cuts and Jobs Act (TCJA)

The answer is “yes”.  The Bloomberg Government newsletter of September 30, 2025, states “The One Big Beautiful Bill Act (OBBBA), P.L. 119-21, makes permanent key provisions of the 2017 Tax Cuts and Jobs Act, including lower individual tax rates, enhanced deductions, a higher estate and gift tax exemption, and the 20% pass-through deduction. Business tax breaks for research and development, property depreciation, and interest expenses are also now permanent…the state and local tax (SALT) deduction cap rises to $40,000 for five years, then reverts to the $10,000 cap… The OBBBA also fulfills several campaign-trail promises with short-term measures, many set to expire after 2028 to limit their cost. These include new deductions for tips, overtime pay, and car loan interest on American-made vehicles, and an additional $6,000 deduction for individuals aged 65 and older.”

The manufacturing industry will also benefit from some of the other provisions of the OBBBA:

  • Authorizes sizable investments in technology and infrastructure
  • Automakers no longer face civil penalties for violations of fleetwide fuel economy standards issued by the National Highway Traffic Safety Administration
  • Increases the advanced manufacturing tax credit, including for chipmakers, from 25% to 35%.
  • Restores the Federal Communications Commission’s authority (lapsed in 2023) to auction spectrum licenses through 2034
  • Authorizes $1 billion to fund the Defense Production Act
  • Prioritizes fossil fuel development, while renewable energy programs are to be phased out
  • Expands drilling on public land, including four onshore lease sales in nine western states, broader access to all leasable lands, and an extension of drilling permits to four years (up from three)
  • Mandates offshore lease sales in the renamed “Gulf of America,” Alaska’s Cook Inlet, the National Petroleum Reserve–Alaska, and the Arctic National Wildlife Refuge
  • Directs the Interior Department to approve qualified coal leasing applications, offer 4 million acres for coal leasing, and increase annual federal timber sales through 2034
  • Lowers royalty rates on oil, gas, and coal; eliminates royalties on extracted methane; and ends fees for nominating parcels for leasing

Pass Legislation to Address China’s Exploitation of U.S. Capital Markets, Economic Incentives, and Trade Policy

Congress is actively considering the following bills to counter China’s economic influence, targeting capital markets, trade, and technology:

The FIGHT China Act of 2025 (S.1053) was introduced in the Senate by Sen. John Cornyn (R-TX) on March 13, 2025. A sister bill (H.R.3946) was introduced in in the House introduced by Rep. Andy Barr (R-KY). The FIGHT China Act restricts American investment into Chinese Communist Party (CCP) military and surveillance companies and other sensitive technologies of adversarial nations.  The December 17, 2025 press release by Rep. Barr states:  “Today, the FIGHT China Act led by U.S. Congressman Andy Barr (R-KY) and U.S. Senator John Cornyn (R-TX) passed the U.S. Senate…The legislation is the strongest sanctions ever passed by Congress on China…This legislation will make President Donald J. Trump’s America First Investment Policy permanent and prevent American investors from unknowingly bankrolling military and tech companies that threaten U.S. national security.”  Instead of being signed by President Trump as a separate bill, it was added to the 2026 National Defense Authorization Bill mentioned below.

The SAFE Act, Secure America’s Financial Exchanges Act (S.1357)  has five co-sponsors in the Senate: Rick Scott (R),  Marsha Blackburn (R),  Bill Cassidy (R),  Cindy Hyde-Smith (R),  and John Neely Kennedy (R). It “would amend the Securities Exchange Act of 1934 to address the issuance of securities by Chinese entities… would require Chinese companies seeking to list securities on U.S. exchanges to disclose detailed information about their relationship with the Chinese government. Specifically, companies would need to reveal any financial support received from the People’s Republic of China, including subsidies, loans, tax benefits, or procurement policy advantages. They must also describe the conditions attached to such support, such as requirements to meet export targets, purchase from specific entities, use certain intellectual property, or employ Chinese Communist Party members. Additionally, companies would have to disclose the presence and composition of Chinese Communist Party committees within their organization, and provide background on any officers or directors who currently or previously held positions in the Chinese government or Communist Party.”

The TASK Act, Transaction and Sourcing Knowledge Act (S.1358), introduced by Senator Rick Scott on April 8, 2025, aims “to enhance transparency by requiring public companies to report on supply chain due diligence, particularly concerning forced labor in Xinjiang, China, to the Securities and Exchange Commission (SEC), bolstering investor protection and addressing human rights concerns through mandated disclosure.”

However, there was another bill that became law in late December that has provisions that benefit American manufacturers and helps rebuild American manufacturing.  This is S.1071 – National Defense Authorization Act for Fiscal Year 2026, which includes significant provisions to benefit American manufacturers by boosting domestic production, funding advanced technologies, creating new networks like the Civil Reserve Manufacturing Network, and focusing on key areas like semiconductors, shipbuilding, and munitions to strengthen the defense industrial base (DIB). Key measures are:

  • Defense Industrial Base Fund Expansion: Broadens allowable spending for materials, equipment, facility construction, and advanced manufacturing investments within the DIB.
  • Civil Reserve Manufacturing Network (CRMN): Establishes a system to rapidly qualify commercial factories to produce defense items during emergencies, increasing surge capacity.
  • Advanced Manufacturing & Technology:
    • Funds R&D for next-gen tech and mandates DoD to adopt advanced methods like additive manufacturing (3D printing).
    • Elevates advanced manufacturing in acquisition governance, co-chairing key groups.
  • Supply Chain Resiliency: Focuses on domestic production for critical items like semiconductors and aims to build advanced manufacturing facilities in the Pacific.
  • Workforce & Skills: Supports upskilling workers and creating pathways for military skills to translate to civilian manufacturing jobs.
  • Targeted Sector Investments: Allocates billions to shipbuilding, munitions, and drones to rebuild stockpiles and capacity. 

Because the OBBBA and the National Defense Authorization bills passed, I am able to give Congress a grade of “B” instead of the “C” they earned because so many of the important bills mentioned above are stalled in their respective Committees.  It is imperative that these bills be voted out of their respective Committees and brought forward into the House and Senate for a vote. My suggestion is to pick one of the above bills that you support and then call your Congressional Representative and Senator to urge them to support that bill.  Remember, “We the People” are the basis for our Constitutional form of government.  If “We the People” are silent and do nothing, then the lobbyists for the multinational globalist corporations and organizations will have the power to influence our elected representatives to support their interests to the detriment of the American people as a whole. 

Tags:, ,
Posted in Legislation, Trade Policy | No Comments »

Why a Market Access Charge Would Have Greater Benefits Than Tariffs

Tuesday, December 9th, 2025

The uproar over President Trump’s tariffs reminded me of another proposed way to balance trade, the Market Access Charge (MAC)  created by John R. Hansen, PhD, Founding Editor of Making America Competitive Again. I met John in 2017 at the annual trade conference of the Coalition for a Prosperous America when he was on CPA’s Advisory Board,, and we have been keeping in touch ever since.

I have written previous articles about the MAC and included a description of the MAC in one of the chapters of my book, Rebuild Manufacturing – the key to American Prosperity. For first-time readers, I explained that the MAC is “a small charge that would be collected on all foreign-source money entering America’s financial markets…which would probably start at two percent and would be collected by U.S. banks receiving foreign money transfer orders via systems like SWIFT.”

I recently connected with John to find out the status of the MAC, and he expanded on the description of the MAC saying, “it is an import tax of probably 1-3% on inflows of all foreign-source money. The MAC would moderate gross inflows of “trash cash, like the trillions of Chinese RMBs and Japanese JPYs, of about $90 trillion per year. This money is “trash cash” because only about two or three percent of these inflows are used to finance real physical investments such as new or updated factories that can be counted as true foreign direct investment (FDI). The remainder goes into America’s “Capital Casino” aka financial sector. We need moderation because speculative portfolio investments such as bonds are money that we do not need and the MAC would reduce the undervaluation of foreign exchange monies relative to U.S. Dollar.

In other articles, I’ve written about how other countries such as China, Vietnam, Korea, and Japan have undervalued their currencies, making their products more competitive in the global marketplace, while our overvalued dollar makes American products more expensive in the global marketplace.  Low exchange rates for foreign currency mean that the dollar prices of foreign goods and services fall relative to the dollar prices of made-in-America goods and services. This makes the dollar prices of foreign-made goods cheaper, hurting the ability of made-in-America goods to compete with foreign-made goods both in domestic U.S. markets and in foreign markets for our exports.

As a result, we import more products than we export, causing the increasingly large trade deficits of the past 25 years. Trade deficits have grown from $451 Billion in the year 2000 to more than double at $918.4 billion for 2024. The increasing dependence on debt from foreign countries causes severe risks for America’s financial, economic, political, and social future.  Our national debt has nearly doubled since 2020 and was $28.1 trillionat the end of 2024.

In contrast, John explained, “The MAC would make America-made goods more competitive against imports in the U.S and against foreign-made products as exports. The MAC would be a “duty on financial imports” that would be set on a quarterly basis — much as the FED sets interest rates. Upon initial implementation, the FED would set the rate to a low non-zero rate if the trade deficit was greater than 1% of GDP. On a quarterly basis, the FED would review trends in the US trade balance (much as it does with interest rates and inflation). If the deficit was greater than 1% of GDP, the MAC rate would be raised by an amount judged to be small enough to not cause a crisis and large enough to move the trade deficit in the right direction.

Conversely, once the trade deficit began to trend downwards towards zero, the MAC rate would be reduced gradually towards zero. The rate would be publicly available on government websites on a 24/7 basis, and at any point in time, only a single rate would apply to all financial inflows, regardless of currency, country of origin, amount, ownership, or intended use.

The MAC would always remain in effect — even at a zero rate. Then, if changing global conditions led to new U.S. trade deficits greater than, for example, 1% of GDP, the FED would simply move the MAC rate back to a non-zero rate and immediately publish the decision. It would be a perfect blend of ‘temporary’ and ‘permanent,’ both required by the IMF for capital flow management tools (CFMs) such as the MAC. The MAC tax would be collected by U.S. banks receiving foreign money transfer orders via systems like SWIFT.”

In our conversation, John clarified a misunderstanding about the word “investment.” He said, “The rich, especially those in the banking community who sponsor America’s “capital casino,” — seem to call all money “investment.” However, this term can be very misleading because it fails to distinguish between money that builds America’s physical productivity and money that the rich use for speculation.

Depending on the year, of America’s roughly $90 trillion of gross annual inflows of “money” from abroad, only 1-3% actually goes into fixed capital formation such as construction or physical improvement of factories, farms, infrastructure, and office automation as defined by BEA.”

He explained, “The vast bulk of the capital inflows — the remaining 97-99% of them — go primarily into portfolio investments such as bonds, non-controlling shares of stock, bank deposits, etc. These speculative financial investments, which have exploded over past decades relative to GDP, make rich speculators even richer (or poorer if they place their bets wrong), increase risk and volatility, increase the risk of massive economic meltdowns for America like the one of 2008, and help drive inflation ever higher. However, such investments do virtually nothing to increase America’s physical productivity or its real GDP.”

He added, “The MAC would target the most important cause of the growing U.S. trade deficits, the decline of U.S. jobs that produce internationally traded goods and services, and the shrinking U.S. budget revenues. Expenditures by foreign direct investors to acquire, establish, or expand U.S. businesses totaled $151.0 billion in 2024, according to preliminary statistics released today by the U.S. Bureau of Economic Analysis. Expenditures decreased $24.9 billion, or 14.2 percent, from $176.0 billion (revised) in 2023 and were below the annual average of $277.2 billion for 2014–2023. As in previous years, acquisitions of existing U.S. businesses accounted for most of the expenditures.

I asked John what would be the benefit of the MAC compared to tariffs, and he listed the following:

  • No cost to Americans – the MAC is paid by foreigners
  • Increases exports of goods and services — not just reduce selected imports
  • Increases manufacturing jobs and jobs in wide range of sectors including upstream and downstream suppliers to manufacturers, such as raw materials, agriculture, and transportation.
  • Provides an even playing field – same ratefor all products, producers, countries, etc. instead of the widely varying rates for tariffs.
  • Provides almost zero opportunity for evasion
  • Provides almost zero risk of retaliation
  • Reduces casino capitalism by increasing profitability of real investments in real made-in-America production compared to simply spinning the roulette wheels faster in America’s speculative capital casinos
  • Increases affordability of goods for all Americans
  • Provides Twenty to Thirty times greater fiscal impact as tax base is $90 trillion, not just $3 -$4 trillion
  • End trade deficits by expanding exports, not just reducing imports
  • End budget deficits without raising taxes on Americans

I asked John if there any economists or organizations besides the Coalition for a Prosperous America of which we are both members that support the MAC.  He replied with the following  examples:

  • Economic Policy Institute – Robert Scott
  • Peterson Institute for International Economics – Joe Gagnon
  • American Compass – they published an excellent booklet promoting the MAC
  • Michael Pettis of Carnegie
  • Former U.S. Trade Representative Bob Lighthizer
  • Steve Miran of Hudson Bay Capital/CEA/Fed
  • Financial Times – Martin Wolf and Gillian Tett
  • Harry Moser, The Reshoring Initiative

I next asked what support does the MAC have by members of Congress, and he replied that Sen. Tammy Baldwin (D-WI) and Sen. Josh Hawley (R-MO) have been supportive of the MAC in the past.  In fact, they had introduced S. 2357, The Competitive Dollar For Jobs And Prosperity Act, on July 31, 2019. This bill would have tasked the Federal Reserve with achieving and maintaining a current account balancing price for the dollar within five years by implementing the “Market Access Charge. But as the bill was competing at the time for attention with the Covid pandemic, it died in committee without receiving a vote. John is currently having discussions with other Senators and Representatives in the House to gain support.

I conclusion, I asked what the chances are of the MAC being added to a bill or being a separate bill in the current Congress.  He said the chances are better than ever because it would be a basis for a bi-partisan agreement/compromise that would break the current budget deadlock.

He added, “In contrast to tariffs, the MAC meets the four criteria set by the International Monetary Fund for Capital Flow Management measures (CFMs), criteria which state that such measures must be transparent, temporary, targeted, and non-discriminatory.”  I didn’t know what CFMs were, so he explained that they are temporary measures aimed at stabilizing a country’s economy during crises. They may include capital controls to manage capital flows and protect foreign reserves. CFMs can involve restrictions on foreign exchange transactions to stabilize currency value. These measures are often linked to IMF lending programs and economic reform conditions. CFMs are designed to prevent excessive volatility in financial markets and promote economic stability. They are typically reviewed and adjusted based on the country’s economic recovery progress.

If we want to increase prosperity based on growing productivity, not growing mountains of debt, it’s time to stop the destruction of American industry and innovation, the loss of high-paying manufacturing jobs, and the collapse of communities.  We must stop importing more goods than we export, leaving us deeply indebted to our trading partners. I urge Congress to urgently pass a bill that would implement the Market Access Charge.  Call your Congressman and Senator today to urge them to support the introduction of such a bill.

Tags:,
Posted in General, Legislation, Trade Policy | No Comments »

Are Tariffs Creating Inflation?

Tuesday, October 14th, 2025

There is considerable debate on whether or not President Trump’s tariffs are creating inflation. Many economists argue that tariffs are inflationary because they directly raise the cost of imported goods and may lead to higher prices for domestic alternatives. This perspective was echoed by former Federal Reserve Chair Janet Yellen, who stated in 2022, “Tariffs tend to boost domestic prices and make goods more expensive.” This article will examine the data to determine whether tariffs are causing inflation.

When a government imposes tariffs on imports, the immediate effect can be raising the price of those imported goods. And, if domestic producers also increase their own prices, this can create upward pressure on the overall price level—an effect referred to as inflation.

However, some analysts believe the inflationary impact of tariffs depends on context. For instance, if tariffs are targeted at goods with plentiful domestic alternatives, or if the affected imports are a minor component of household spending, the inflationary effect might be muted. The Congressional Research Service notes: “The overall effect on inflation depends on the share of products subject to tariffs and the ability of consumers to substitute away from higher-priced imports.”

While there is agreement that tariffs tend to increase the prices of affected goods, the extent to which they contribute to overall inflation depends on the structure of the economy and the scope of the tariffs. Most empirical evidence suggests tariffs do put upward pressure on prices, but the scale and significance can vary.

After President Trump announced new and expanded tariffs on a wide range of Chinese imports in 2025—covering sectors like electric vehicles, batteries, and advanced technology—economists expressed their opinions on the likely impact on inflation. Here’s an overview of professional opinions from several economists and economic organizations:

1. Goldman Sachs

Goldman Sachs economists argued that “The new tariffs are likely to have a small direct impact on inflation, since the targeted products account for a minor share of consumer spending. However, if tariffs are broadened or trigger retaliation, the impact could be more significant, especially if supply chains are disrupted.” However, they noted that “broader or retaliatory tariffs could have a more meaningful effect if they lead to supply chain disruptions or higher costs for intermediate goods.”

2. Lawrence Summers (Former U.S. Treasury Secretary and Harvard Professor)

Lawrence Summers criticized the 2025 tariffs, stating, “Tariffs are taxes that get passed on to consumers. The more tariffs, the more upward pressure on prices,” and that the new measures “risk modest but noticeable increases in prices for consumers, especially on goods made with Chinese components.”

3. Paul Krugman (Nobel Laureate, New York Times Columnist)

Krugman wrote that while the immediate, direct impact of the 2025 tariffs on inflation “will likely be limited and largely sector-specific,” there’s a risk that trade wars escalate: “Retaliation and further trade barriers could eventually seep into broader price increases.”

4. Moody’s Analytics (Mark Zandi, Chief Economist)

Mark Zandi of Moody’s Analytics stated the 2025 tariffs “will have a marginal, temporary effect on inflation,” estimating an increase of “less than 0.1 percentage point” on the Consumer Price Index in the following year. He cautioned, however, that “if the trade conflict escalates, the inflation impact could be more significant.”

5. Peterson Institute for International Economics

A policy brief from PIIE pointed out, “Past experience shows that tariffs are paid by U.S. importers and often passed on to consumers, though the 2025 set of tariffs mainly target industries where substitution is possible, potentially blunting the inflation impact.”

Summary Table

Economist/OrganizationOpinion on Inflation EffectSource Link
Goldman SachsSmall direct impact, higher risk if escalation occursGS Research
Lawrence SummersModest but noticeable upward pressure on pricesFinancial Times
Paul KrugmanLimited sectoral effect, bigger risk if trade war escalatesNYT
Mark Zandi (Moody’s)Marginal, temporary rise; more if conflict escalatesMoody’s Analytics
Peterson Institute (PIIE)Tariffs paid by importers, inflation muted by substitutionsPIIE

A September 25, 2025 report titled , “Tariffs Are Not Causing Inflation: Breaking Down August 2025 CPI” by Andrew Rechenberg of the Coalition for  Prosperous America argues “Inflation today is moderate, running far below the post-COVID peak and even below January 2025 levels, before any new tariffs were enacted. Furthermore, the main drivers of August 2025 inflation are housing shortages, energy demand, and food supply shocks — not tariffs.”

The report breaks down the August Consumer Price Index showing that the following drivers for inflation were:

  • Shelter: +0.4% m/m
  • Airline Fares: +5.9% m/m.
  • Beef: +2.7% m/m retail; +8% wholesale PPI.
  • Coffee: +6.9% m/m.
  • Electricity: +0.3% m/m
  • Eggs: flat m/m, but +10.9% Year over Year

Surprising to economists was the fact that many imported goods were not the drivers of inflation as shown below:

  • Autos: New vehicles rose +0.3% m/m and used vehicles +1.0% m/m
  • Steel & Aluminum: +0.4% m/m
  • Electronics: flat to +0.1% m/m
  • Pasta, Olive Oil, and Spices: 0.0–0.2% m/m

Andrew concludes: “If tariffs caused “economic disaster,” inflation wouldn’t be at 2.9% — it would look like 2022 all over again. Inflation data does not support these dire warnings. CPI rose just 0.2% in August, while PPI actually declined. As shown in Figure 1, Inflation today is running 63% below the 2022 average and even just below January 2025 inflation levels, hardly the sign of an “economic disaster.”

In reality, an examination of the Consumer Price Index (CPI) from March 2025 to July 2025 shows that the main drivers of price increases (inflation) are similar to the August report examined by CPA. 

1. Energy Prices

  • Import-related: Increases in global oil and gas prices due to geopolitical tensions or supply constraints (e.g., OPEC+ production cuts, Middle East instability) drove up domestic fuel and electricity prices.
  • Domestic: Infrastructure failures or domestic supply chain issues (e.g., refinery outages, grid failures) also boosted local energy prices.

2. Food Prices

  • Import-related: Rising prices of imported foodstuffs (such as coffee, cocoa, grains, or meat) due to poor harvests, supply chain disruptions, or currency depreciation.
  • Domestic: Domestic droughts, floods, or other adverse weather events affected local crop yields, and labor shortages increased local production costs.

3. Wages and Labor Costs

  • Domestic: Wage increases from tight labor markets or new government policies (minimum wage hikes) led to higher costs for services and goods, which was passed on to consumers.

4. Rents and Housing Costs

  • Domestic: Continued demand for housing, supply shortages, and higher mortgage interest rates pushed up rents and property costs.

As we can determine from data for the CPI from March to July 2025, the main drivers for inflation are related to domestic policies, not tariffs.  Each of these drivers could be explored in separate articles, but that would be out of my area of focus and expertise. 

Thus, I continue to support President Trump’s tariffs that will balance our trade deficit and help rebuild American manufacturing.  I still believe that fluctuating tariffs on Chinese imports that are only temporary and at lower levels won’t have the lasting effect needed to rebuild America’s industrial base.  Tariffs on Chinese imports need to be made permanent at a high level (100-125%) to influence CEOs of American companies to decide to reshore manufacturing to America, expand existing plants, and/or build plants in new locations.  This action is truly the only way to Make America Great Again.

Tags:,
Posted in Manufacturing, Trade Policy | No Comments »

What is the Impact of Tariffs on the Manufacturing Industry

Tuesday, September 23rd, 2025

The reciprocal tariffs mentioned in my previous article went into effect August 1, 2025.  These tariffs are intended to protect domestic industries from foreign competition, encourage returning manufacturing from China and other countries to the U.S, and raise revenue.  Tariffs aren’t affecting U. S. companies that manufacture Made in America products; however, they are affecting U.S. manufacturers that rely on imports for parts and subassemblies.

A tariff on imported goods may increase the cost of those goods for manufacturers that depend on imported parts or raw materials.  These cost increase may be too significant to be absorbed entirely by the manufacturer and manufacturers may also face intense market competition forcing them to absorb some or all of the added costs.  These higher costs may lead to higher prices or reduced profit margins for the company, which directly reduces their profitability. Furthermore, retaliatory tariffs from other countries can limit export opportunities for manufacturers, shrinking their revenue streams.

For example. When the U.S. Steel and Aluminum Tariffs of 2018 imposed tariffs of 25% on imported steel and 10% on imported aluminum, it had a negative impact on manufacturers that used these materials, such as carmakers and appliance manufacturers.  Ford Motor Company reported that the steel tariffs cost them $1 billion in additional expenses, leading to lower profits. Similarly, Whirlpool, a major U.S. appliance maker, saw higher costs for washing machine components and announced price increases on its products.

 However, long-term data shows that these tariffs boosted domestic production of U.S. steel and aluminum and actually saved the industry from substantially contracting further.  U.S. production of steel and aluminum has greatly increased since 2018, plants have been expanded and new plants have been built, increasing jobs in this industry.

The reciprocal tariffs President Trump promised to impose went into effect August 1, 2025.  Here’s a summary of the reciprocal tariffs on the top ten U.S. trading partners:

RankCountryU.S. Imports Value (2024, est.)Reciprocal Tariff Actions (2025)
1China$515 billionTariffs on U.S. soybeans (30%), autos (25%), pork (35%), liquefied natural gas (LNG) (25%), and whiskey (20%). Electronics and agricultural products heavily targeted.
2Mexico$385 billionTariffs mostly on U.S. pork (20%), apples (20%), cheese (25%), and various steel products (15–25%). Focus on U.S. agricultural and steel/aluminum exports.
3Canada$340 billionTariffs on steel (25%), aluminum (10%), U.S. whiskey (10%), orange juice (20%), and various household products (10–30%). Application is selective and closely mirrors U.S. tariff lists.
4Japan$170 billionTariffs on U.S. beef (38%), wine (15%), and motorcycles (20%). Also, technical restrictions on auto parts.
5Germany$145 billion*EU-wide tariffs: autos (25%), motorcycles (31%), bourbon (25%), peanuts (25%), denim (25%). Retaliation is coordinated through the EU.
6South Korea$110 billionTariffs on U.S. beef (18%), whiskey (20%), certain chemical exports (15–25%), and various machinery components (10–20%).
7United Kingdom$87 billionTariffs (via the UK’s post-Brexit regime): bourbon and other whiskies (25%), motorcycles (25%), orange juice (20%), jeans (10–15%).
8France$80 billion*EU-wide retaliation as in Germany: cheeses, bourbon, textiles (10–25%), and Harley-Davidson motorcycles (31%).
9India$73 billionTariffs on U.S. almonds (20%), apples (20%), walnuts (20%), Harley-Davidson motorcycles (50%), and medical devices (15–30%).
10Italy$68 billion*EU-wide retaliation: affected products include denim, motorcycles, whiskey, and certain agricultural goods (10–31%).

President Trump’s renewed tariff policy has affected a wide array of industries, from automobiles to electronics and telecommunications. Here’s how several key sectors have been hit, with up-to-date statistics:

1. Automobiles

  • Tariff Details: On April 3, 2025, the U.S. imposed a 25% tariff on Chinese-made automobiles and car parts.
  • Cost Increases: According to the Alliance for Automotive Innovation, average U.S. auto manufacturing costs rose by $1,800 per vehicle.
  • Price Impact: Ford and General Motors reported MSRP increases between $1,500–$2,300 for popular models, affecting consumer demand.
  • Profits: GM’s Q2 2025 earnings fell by 10%, attributing $650 million in added costs directly to tariffs.

2. Motorcycles

  • Tariff Details: Motorcycles imported from China and the EU are subject to 31% tariffs in 2025.
  • Cost Increases: Harley-Davidson estimated that tariffs have added $2,200 to the production cost of each exported bike.
  • Sales Decline: U.S. motorcycle exports to the EU dropped by 22% in the first half of 2025, according to U.S. Department of Commerce data.
  • Profits: Harley-Davidson’s international profit margins shrank by 14% compared to Q2 2023.

3. Electronic Equipment

  • Tariff Details: A 25% tariff was placed in 2025 on Chinese electronic components, including circuit boards and sensors.
  • Cost Increases: The Consumer Technology Association reported the average cost for U.S. electronics manufacturers rose by 11% across the board.
  • Price Impact: Apple raised iPad and MacBook prices by 7% this year, and smaller manufacturers like Sonos reported 12% lower earnings due to increased import costs and delayed shipments.
  • Industry-wide effect: According to the Electronic Components Industry Association, U.S. imports of certain components from China fell by 19% due to the higher costs, forcing some manufacturers to consider moving production outside the U.S.

4. Telecommunication Products

  • Tariff Details: Key telecom products—including modems, routers, and 5G networking gear—now face a 15% tariff when imported from China in 2025.
  • Cost Increases: Cisco Systems reported a $300 million increase in production expenses over the first two quarters of 2025, which it directly attributed to these tariffs.
  • Price Impact: U.S. telecom providers such as AT&T and Verizon announced average price hikes of 8% on internet hardware and new installations.
  • Market Share: U.S. telecom equipment exports to Asia declined by 15%, largely because of reciprocal tariffs on American products.

The electronics industry, characterized by complex global supply chains, has been particularly affected by U.S.-China trade tensions. Tariffs on Chinese-made circuit boards and components have increased costs for American manufacturers of computers, smartphones, and consumer electronics. Many smaller manufacturers, lacking the resources to absorb higher costs or negotiate new supply contracts, have faced shrinking profit margins and, in some cases, layoffs or business closures.

Here are examples of the effect on specific companies:

  1. Tesla: With the reintroduction of 25% tariffs on Chinese-made electric vehicles and batteries in 2024, Tesla has seen increased costs for its U.S.-assembled vehicles that use Chinese batteries and electronics. The company announced in May 2025 that the price of its Model Y and Model 3 would rise by $2,000 in North America, citing higher costs for batteries and electronic components. Elon Musk publicly stated that profit margins had dropped in Q2 2025 as a direct result of the tariffs.
  2. Caterpillar and Construction Equipment:
    Caterpillar, a leading U.S. maker of construction and mining equipment, relies on imported steel and engine parts from Asia. Trump’s new tariffs on Chinese and Southeast Asian metals have increased input costs by an estimated $200 million in 2024 alone. The company’s quarterly earnings report in July 2024 cited tariffs as a key factor in a 12% drop in net profit.
  3. Apple and Consumer Electronics:
    Apple, which assembles many of its products in China, is facing new 2024 tariffs on imported computer parts and finished devices. This has forced Apple to increase the prices of iPads and MacBooks in the U.S., and the company warned investors that gross margins would be tighter in the second half of 2024. Smaller electronics makers have reported even greater challenges, with some delaying product launches or laying off staff.
  4. General Motors (GM) and Car Parts:
    GM sources many car components, such as sensors and wiring harnesses, from Chinese suppliers. The 2024 tariffs have pushed up the cost of these parts, forcing the company to trim its profit outlook for the year. In its June 2024 investor call, GM confirmed that U.S. consumers would see higher prices for popular models like the Chevrolet Equinox and Silverado.

Why Tariffs Are Affecting the Manufacturing Industry So Greatly

For the past 30 years, outsourcing has been a cornerstone of U.S. manufacturing. First, manufacturers outsourced to Mexico, Puerto Rico, and the Philippines.  After China was granted Most Favored Nation status in the year 2000, manufacturers turned to Chinese suppliers for components, subassemblies, and finished goods, leveraging advantages of lower cost labor and materials, as well as less regulatory and environmental burdens. Many of my previous articles have outlined in detail the adverse effects of outsourcing to China on the U.S. manufacturing industry. 

Now, the introduction of these new tariffs is fundamentally changing this equation, turning an once cost-saving strategy into a financial burden for many U.S. manufacturers. Outsourcing has now become more expensive in the following ways:

1. Direct Tariff Costs

  • Tariff Rates: Tariffs on Chinese goods are now as high as 25% on electronics parts, 20% on automobile components, and 15% on telecom equipment. Any component or assembly imported from China is now subject to these elevated fees.

2. Supply Chain Disruption and Rushed Re-Sourcing

  • Supplier Shifts: Many manufacturers tried to pivot quickly to suppliers in Vietnam, Mexico, or India to avoid tariffs, but these regions often do not have the scale, experience, or infrastructure China offers.
  • Startup and Transition Costs: Changing suppliers requires significant investment, including qualifying new vendors, adapting designs to new materials, and sometimes retooling factories.

3. Increased Lead Times and Logistical Challenges

  • Shipping Delays: With tariffs in place, the process of importing from China became slower due to increased customs inspections and complex paperwork.
  • Inventory Costs: Companies like Apple and Dell reported having to maintain higher inventory levels—tying up capital and storage space—to avoid disruptions in the event of customs-related delays at ports.

4. Loss of Economies of Scale

  • Production Costs: Many U.S. manufacturers once benefited from China’s massive scale, which kept per-unit costs very low. With some companies moving only part of their production elsewhere to avoid tariffs, both U.S. and Chinese suppliers often increased prices due to reduced order volumes, further eroding cost advantages.

Outsourcing to China, once a reliable way to cut costs, has become a liability under the 2025 tariffs.  The solution to avoid paying tariffs is to “reshore” – return manufacturing to America.  It may be difficult if not impossible to find U.S. suppliers for some commodities, such as some electronic components. Manufacturers can get help finding U.S. manufacturers to replace their Chinese vendors through consulting services offered by The Reshoring Initiative at this link.

In addition, we may need to establish Federal grants similar to SBIR grants for companies to startup producing critical components again the in U.S. The end goal is worth doing whatever it takes to rebuild American manufacturing to the point where we are once again self-sufficient in producing the goods we need to protect the health and welfare of all Americans and remain an independent nation by having the goods we need to protect our national security and sovereignty.

Tags:,
Posted in Manufacturing, Trade Policy | No Comments »

What Have Been the Effects of President Trump’s Tariffs?

Tuesday, August 5th, 2025

During his campaign for re-election for President, President Trump pledged to address the unfair and unbalanced trade that the U.S. has experienced for many years.  Contrary to many politicians, President Trump kept his campaign promise by establishing an America First Trade Policy in which trade and economic policies would “put the American economy, the American worker, and our national security first.”  He announced, “I am establishing a robust and reinvigorated trade policy that promotes investment and productivity, enhances our Nation’s industrial and technological advantages, defends our economic and national security, and — above all — benefits American workers, manufacturers, farmers, ranchers, entrepreneurs, and businesses.” 

The remedies to address unfair and unbalanced trade included investigating “the causes of our country’s large and persistent annual trade deficits in goods, as well as the economic and national security implications and risks resulting from such deficits, and recommend appropriate measures, such as a global supplemental tariff or other policies, to remedy such deficits.”

As CNN Business reported, “In April, Trump imposed “reciprocal” tariffs as high as 50% on most of America’s trading partners.”. On April 9, President Donald Trump gave the world a three-month window to negotiate trade deals with the United States or face higher “reciprocal” tariffs. With just five days remaining in that tariff moratorium, the White House is expected to begin delivering a message to a dozen or so countries: Time is up, and here’s your new tariff rate.”

The article stated that Trump “told reporters that he would notify 10 to 12 nations a day over the course of the next five days, detailing their new tariffs in letters that the White House would begin sending on Friday. In most cases, the new rates would go into effect August 1, Trump said. “They’ll range in value from maybe 60% or 70% tariffs to 10% and 20% tariffs, but they’re going to be starting to go out sometime tomorrow,” Trump said. “We’ve done the final form, and it’s basically going to explain what the countries are going to be paying in tariffs.”

A July, 19, 2025, ABC News article titled, “What have Trump’s tariffs achieved so far? Experts weigh in,” Max Zahn wrote “The Trump administration touts tariffs as part of a wider set of “America First economic policies,” which have “sparked trillions of dollars in new investment in U.S. manufacturing, technology, and infrastructure,” according to the White House’s website.

The article stated, “Scores of companies have pledged new investment in the U.S., including tech giants Apple and Nvidia, pharmaceutical companies Merck and Johnson & Johnson as well as automakers Hyundai and Stellantis, the White House says. The whole idea is to encourage reshoring of manufacturing and change the balance of trade. That could all have some positive impact,” Morris Cohen, a professor emeritus of manufacturing and supply chains at Duke University, told ABC News.”

The Trump Effect page on the White House website states, “Since President Donald J. Trump returned to office, his America First economic policies have sparked trillions of dollars in new investment in U.S. manufacturing, technology, and infrastructure…The U.S. has seen a surge of private and foreign investment that are fueling job growth, innovation, and opportunity across every corner of the country. The website provides a list of the major investments by foreign countries and companies at this link.

Adding up the totals on the link comes to about 40 billion dollars. Of course, these pledges were made under threat of high tariffs, so time will tell if the companies and countries keep their pledges.

On July 29th, MSN Markets Today reported “The U.S. trade deficit in goods narrowed to the lowest level in nearly two years in June as imports fell sharply, cementing economists’ expectations that trade likely accounted for much of an anticipated rebound in economic growth in the second quarter.

The goods trade gap narrowed 10.8% to $86.0 billion last month, the lowest level since September 2023, the Commerce Department’s Census Bureau said. Economists polled by Reuters had forecast the goods trade deficit would rise to $98.20 billion. Imports of goods decreased $11.5 billion, or 4.2%, to $264.2 billion, the lowest level since March 2024. The decline was led by a 12.4% plunge in consumer goods imports.” 

On Sunday, August 3, 2025, the English edition of Trending News & Research reported:  “The US government under Donald Trump is collecting more money than ever from import tariffs, with customs duty revenue crossing $100 billion in fiscal year 2025—more than double what it brought in just five years ago. Treasury and Homeland Security figures suggest the final tally could reach $300 billion by year’s end, fueled by sweeping tariffs imposed on goods from over 100 countries, including India, Brazil, Russia, China and Canada. Customs duties now make up nearly 5% of total federal revenue, up from an average of 1.6% in previous decades. July alone saw the US collect a record $28 billion in tariff duties, with economists projecting that number could climb as high as $37 billion per month from August onward, when new rate hikes take effect.”

The Bi-Partisan Policy Center Tariff Tracker shows that the U.S. has brought in $128 billion in revenue from gross tariffs and other excise taxes in 2025 as shown by the following chart.

Note: “An important caveat is that the above data represent gross tariff and certain other excise tax revenue (emphasis ours)…Net tariff revenue in recent years has been 80% to 85% of gross tariff and certain other excise tax revenue.”

The Global Business Alliance recently published a Country-By-Country Reciprocal Tariff Rates Schedule available at this link:  GBA notes “This document serves as a reference tool for country-by-country tariff rates. As they are subject to change at any time, depending on the progress of trade negotiations and President Trump’s discretion, updates to the following table will not be instantaneous. Barring any additional extensions or individual agreements, these rates are expected to go into effect on August 1, 2025.”

Of course, not everyone is happy with the tariffs. Companies that focus on selling imported goods, such as clothes, toys, consumer electronics, and electronic and electrical products are being hit the hardest due to rising costs, and small businesses that rely on imported materials from China to produce their products are also being hit hard due to rising costs.  The problem is that for some products, there are no longer any U.S. sources.

As long tariff rates get imposed, rescinded, increased or reduced, it will make inventory management complicated as businesses big and small have to decide how and when to allocate capital. They have to decide whether to stockpile inventory before more increases come down the line or do they minimize inventory to preserve cash. Larger businesses will be better able to absorb the tariff costs or negotiate alternative supply cost arrangements than small business.

It takes time, resources, and administrative skill to navigate the kinds of sweeping changes to operations that tariffs require.  Small business owners will need to navigate sourcing new suppliers, deal with increased paperwork and compliance costs, and decide how and when to use cash reserves to navigate the new playing field that tariffs require.

If international tariffs become permanent as I have recommended, they will transform business models, market dynamics, and innovation in the global economy. Tariffs will engender supply chain disruption away from previously reliable partners, modify product reformulation to use different inputs unaffected by tariffs, and strategic repositioning in the market based on new cost structures. It’s going to become crucial to build relationships with domestic suppliers.

One of the goals of tariffs is to help domestic industries expand as it pushes consumers to buy from U.S. brands. The danger is that tariffs may lead to higher domestic prices as imports become more expensive, competition is reduced, and prices increase as U.S. companies are able to charge more.

We will likely see a faster adoption of automation and utilization of AI to offset input costs and domestic alternatives to imported materials. This will create new business opportunities for U.S. manufacturers. 

This transition to a new global playing field maybe difficult for some, but it is necessary if the U S. ever hopes to become self-sufficient again in producing the goods we need to protect the health and welfare of all Americans and remain an independent nation by protecting our national security and sovereignty.

Tags:,
Posted in General, Manufacturing, Trade Policy | No Comments »

Does the One Big Beautiful Bill Help Rebuild American Manufacturing?

Tuesday, July 22nd, 2025

In my January article titled, “What Legislation Should Congress Pass to Help Rebuild American Manufacturing?”  I made several recommendations.  Now, we will examine what provisions the One Big Beautiful Bill (OBBB) included that would help achieve the goal of rebuilding American manufacturing.

I asked one of my long-time business colleagues, Bruce Knowlton, to examine what tax benefits the OBBB provides for American manufacturers.  Bruce recently retired from being a long-time partner at Moss Adams LLP in San Diego and will begin teaching tax accounting at San Diego State University this fall.  He provided his analysis of the OBBB provisions with regard to the following tax-related recommendations I made in my article:

1.  Immediate cost recovery for investments in the types of machinery and equipment:

Bruce said “this was enacted and made permanent and called ‘bonus depreciation.’  It also increased the Section 179 expensing for companies that buy assets up from $1 million to $2.5 million.  This is now phased out when assets purchased exceed $4 million.  Please note that Section 179 expensing requires a business tax profit to the extent of the expensing but bonus depreciation does not.  A new provision was added to award manufacturers who build new manufacturing facilities (i.e. building structures) in terms of their “Qualifying Production Property” with 100% depreciation vs. a normal 39-year tax life.  This generally covers facilities used directly in the manufacturing process with construction starting in the U.S. after 1/19/25 and finished by 12/31/28 with a placed in-service date of after July 4, 2025 and before January 1, 2029.”

2. Immediate write-offs for investments in research and development: 

Buce said this was enacted. “The research credits also remain as is.  That said now a manufacturer that has gross revenue of no more than $31 million can go back and amend returns starting with their 2022 return to expense their previously capitalized R&D costs to get refunds.  Further, larger companies can elect to amortize the remaining capitalized R&D costs for 2022-2024 over a one- or two-year period.”

3. Reduce corporate tax rate to 15% from the 21% of the TCJA

Bruce said, “The corporate tax rate remains at 21% as it has been under TCJA. There was a permanent extension of the 20% qualifying business tax deduction which applies to closely held business (nonpublic companies) organized as S corporations or LLCs to continue their top marginal rate at 29.6% versus 37% for their individual U.S. resident owners. 

There was also a change in the business interest expensing rule that limits that deduction to 30% of EBITDA (earnings before income tax, depreciation and amortization) vs. EBIT (earnings before interest and taxes) currently.  Smaller companies with revenue of $31 million or less are still exempt from this rule. There were reductions for international companies as well to potentially lower the overall foreign intangible income tax.”

He added, “There were also a couple of indirect benefits.  One was the carve out reporting of overtime for their employees who receive overtime pay to qualify them for the new tax deduction of overtime pay.  The other was to expand the eligibility for qualified small business stock issued after 7/24/25 and the income exemption amounts on a sale of that stock as well as a shorter vesting period vs. the previous 5-year cliff vesting that was required.”

An article titled, “One Big Beautiful Bill Act” Tax Policies: Details and Analysis,” published on July 4, 2025 by the Tax Foundation stated the  OBBB Act would:

  • Permanently restore immediate expensing for domestic research and development (R&D) expenses; small businesses with gross receipts of $31 million or less can retroactively expense R&D back to after 12/31/21; all other domestic R&D between 12/21/21 and 1/1/25 can accelerate remaining deductions over a one- or two-year period.
  • Permanently reinstate the EBITDA-based limitation on business net interest deductions.
  • Permanently restore 100 percent bonus depreciation for short-lived investments.
  • Temporarily provide 100 percent expensing of qualifying structures, with the beginning of construction occurring after Jan. 19, 2025, and before Jan. 19, 2029, and placed in service before Jan. 1, 2031.
  • Make the Section 199A pass-through deduction permanent; increase phase-in range of limitation by $50,000 for non-joint returns and $100,000 for joint returns; create a minimum deduction of $400 for taxpayers with $1,000 or more of qualified business income (QBI) for material participants.
  • Implement a 1 percent floor on deduction of charitable contributions made by corporations.
  • Eliminate clean electricity production credit (45Y) and investment credit (48E) for projects placed in service after 2027, except for projects that begin construction within 12 months of passage and baseload power sources such as nuclear, hydropower, geothermal, and battery storage; introduce restrictions related to foreign entities of concern (FEOC).
  • Extend the clean fuel production credit (45Z) until 2030 and expand eligibility.
  • Introduce FEOC restrictions for several other credits, including the nuclear production credit (45U), the clean fuel production credit (45Z), the carbon oxide sequestration credit (45Q), and the advanced manufacturing production credit (45X); alter phaseouts and eligibility for 45X and 45Q.
  • Require intangible drilling and development costs to be taken into account for the purposes of computing adjusted financial statement income.
  • Add income from hydrogen storage, carbon capture, advanced nuclear, hydropower, and geothermal energy to qualifying income of certain publicly traded partnerships treated as C corporations.”

It is anticipated that these tax changes will help American manufacturers be more competitive in the global economy, but they do not specifically address the unfair trade practices, currency manipulation, product dumping, and Intellectual Property Theft done by China.  It would take passage of other bills to fulfill some of the other recommendations I made in my January article, namely:

Impose a Market Access Charge (MAC) as proposed by Dr. John R Hansen, (PhD economist and  Economic Advisor, The World Bank (retd.)  “Forcing foreigners to pay a market access charge (MAC) if they want to dump their speculative money into America’s financial markets when US trade deficits show that the global demand for dollars and dollar-based assets like stocks and bonds is already excessive. In addition to encouraging the dollar to move to a more competitive level, thus boosting economic growth and family incomes, the MAC could also generate hundreds of billion dollars of new government revenue per year.

Pass a Patent Reform Bill to restore inventors’ rights and end abuses by the Patent Trial and Appeal Board (PTAB). 

A new bill similar to HR 8134, the Restoring America’s Leadership in Innovation Act (RALIA), introduced by Rep. Thomas Massie (R-KY) and Rep. Marcy Kaptur (D-OH) in the previous session of Congress would be supported  by the largest inventors’ organization, US Inventors.

Revoke China’s Most Favored Nation Status (aka Permanent Normal Trade Relations (PNTR) that was granted by President Clinton on October 10th, 2000 when he signed the U.S.-China Relations Act of 2000 into law. 

“Passing such a bill should be a major priority for the 119th Congress as soon as possible. Without PNTR status, all products from China would by default be subject to higher tariffs. This would reduce off-shoring by discouraging American investors and corporations from doing business in China. It would increase reshoring and diminish demand for Chinese goods, bolstering the sales of American manufactured products.”

Reduce the Allowed Value of De Minimis imports from the $800 allowed by the Trade Facilitation and Trade Enforcement Act of 2015 to a lower de minimis threshold.

The Coalition for a Prosperous America states: “U.S. companies and workers are subjected to a new level of job-destroying competition. Illicit drugs, such as fentanyl, and counterfeit goods are shipped directly to US consumers while evading detection. The predictable result is a major calamity putting U.S. producers and traditional retailers out of business and destroying jobs.” CPA urges “Congress to lower the de minimis threshold to $9 among other reforms.”

The One Big Beautiful Bill is a first step in passing legislation that would help in rebuilding American manufacturing’s capacity and eliminate dependence on China and other adversarial nations. Passing the other bills recommended by this article would especially help rebuild manufacturing capacity in industries that are critical to U.S. economic and national security. They would stop the destruction of American industry and innovation, the loss of high-paying manufacturing jobs, and the collapse of communities. They would help to create prosperity for our children and grandchildren and ensure that they will continue to live in a free country. 

Tags:
Posted in Legislation, Manufacturing, Taxes/Regulations, Trade Policy | No Comments »

Why Trump’s Tariffs on China Should Become Permanent and How to Make it Happen

Wednesday, June 18th, 2025

It’s been a volatile few weeks for Trump’s tariffs since he announced a 10% tax on all imported products from more than 50 countries, and placed additional duties on items from some of the largest U.S. trading partners, including Canada, Mexico, the European Union, and China.  The additional tariffs have ranged from 25% on Canada, Mexico, and the European Union to 125% and 145% briefly on China.  The imposition of these tariffs brought many countries to the negotiating table in the past two months, resulting in trillions of dollars of proposed investment in the U.S. in an attempt to reduce the additional tariffs.

Trump’s tariffs had an immediate beneficial effect on the U.S. trade deficit, according to an article titled “Goods Trade Deficit Plummets in April,” in the Wall Street Journal on May 30, 2025. The article reported that “The U.S.’s trade deficit for goods shrank substantially in April, as new tariffs weighed on imports.”

  • Goods imports fell by 20% to $276.1 billion while exports rose 3.4% to $188.5 billion.
  • It was the biggest one-month drop in goods imports on record
  • This yielded a goods trade deficit of $87.6 billion, down from $162.3 billion in March”

President Trump has touted trillions of dollars of investments into the U.S. brought about by deals he has negotiated after the imposition of tariffs and threats of higher tariffs.  The White House website provides a partial list published a partial list titled “The Trump Effect,” — which it said demonstrated “his America First economic policies have sparked trillions of dollars in new investment.”

On April 11, 2025, I was interviewed by Conner Lee, a reporter for The Epoch Times, on my opinion of Trump’s tariffs.  The article ran online on April 14th and in the paper for the week of or the week of April 16-22nd in the California section  I was quoted as saying, “Michele Nash-Hoff, president of ElectroFab Sales, a California-based manufacturers’ representative firm, said that businesses will know within the next three to six months whether the tariffs will be long-term.

“The tariffs will be an additional major driver to returning manufacturing to America, especially if the tariffs are not just temporary if they’re long-term,” she told The Epoch Times.

Nash-Hoff thinks the tariffs are not going to have an impact on inflation like some people are fearing. She referenced the 2018 U.S. tariffs on steel, aluminum, and some imports from China, which were followed by only about a 0.5 percent rise in the inflation rate.

She said the latest tariffs will benefit the U.S. economy by creating more American jobs, which means more people paying taxes. That, in turn, will help reduce the country’s annual trade deficit and lower its national indebtedness, she said.”

I believe that another trade deal with China that includes low rates of tariffs won’t work any better than the trade agreement President Trump negotiated in his first term.  China has violated the terms of that agreement just as it did the terms of becoming a member of the World Trade Organization in the year 2000. 

To ensure that China honored the terms of the WTO agreement, the United States–China Economic and Security Review Commission (informally, the U.S.–China Commission, USCC) was established on October 30, 2000.  The USCC has been “responsible for providing recommendations to Congress based on their findings on bilateral trade with the People’s Republic of China, evaluating national security and trading risks in all industries and conducting research on China’s actions.”  The Commission held hearings and submitted an annual report to Congress.

 Year after year, the Commission reported how China violated the WTO agreement, but no punitive actions were taken by Congress for 17 years. The reports repeatedly cited China’s unfair trade policies of intellectual property theft, government subsidies to domestic manufacturers, product dumping at below cost to capture market share of particular industries, fraudulent labeling, trans-shipping, and undervaluing their currency.  I have read several of the reports in the past and wrote articles about the findings. The article I wrote about the 2021 report can be found at this link.

In the May 19, 2025 Epoch Times article titled “Despite Negotiations, China Finds Ways to Circumvent US Tariffs,” Antonio Graceffo wrote “Even as Chinese leader Xi Jinping and President Donald Trump negotiate a new trade agreement, China continues to bypass U.S. tariffs through a global network of loopholes, rerouting schemes, and gray market tactics that keep its exports flowing into the United States despite trade restrictions…exploiting a combination of legal loopholes and gray zone tactics. These include exploiting postal and customs blind spots, rerouting through third countries, forged documentation, offshore assembly, and the creation of overseas distribution hubs that allow Chinese products to be re-exported under neutral labels.”

He explained, “China has also expanded its use of gray zone trade tactics by employing transshipment, committing document fraud, practicing under-invoicing, and utilizing overseas assembly. Chinese exporters are routing goods through Vietnam, Malaysia, Indonesia, Thailand, and even the European Union, where products are repackaged or relabeled to obscure their origin.”

However, if the Trump administration wants to seriously tackle the trade deficit with China, they first must handle the half a dozen lawsuits by ten states that are challenging the president’s ability to impose tariffs without the approval of Congress.  On April 23, 2025, AP News reported that “A dozen states sued the Trump administration in the U.S. Court of International Trade in New York on Wednesday to stop its tariff policy, saying it is unlawful and has brought chaos to the American economy.” The lawsuits “challenged Trump’s claim that he could arbitrarily impose tariffs based on the International Emergency Economic Powers Act.”

On Wednesday, May 28, 2025, CNN Business News reported that a three-judge panel at the U.S. Court of International Trade “ruled that President Donald Trump overstepped his authority to impose sweeping tariffs that have raised the cost of imports for everyone from giant businesses to everyday Americans.”  The ruling “stopped Trump’s global tariffs that he imposed citing emergency economic powers,” also “prevents Trump from enforcing his tariffs placed earlier this year against China, Mexico and Canada, designed to combat fentanyl coming into the United States.”

The tariffs have been reprieved from being stopped because, on Wednesday, May 28, 2025, ABC News reported that “The United States Court of Appeals for the Federal Circuit issued an administrative stay of the decision while it considers Trump’s appeal.”

The Coalition for a Prosperous America recommended action that can be taken by Congress to solve this problem in their weekly newsletter, Prosper Weekly.  CPA PRESIDENT JON TOOMEY SAID: “Wednesday’s court ruling underscores the urgent need for Congress to act decisively to implement President Trump’s America First tariff strategy into law. While the administration addresses these legal challenges, Congress must seize this opportunity to legislate the President’s bold vision. Passing legislation to codify the universal 10% tariff would not only secure critical revenue to offset our unsustainable national debt and deficit, but it would also reaffirm America’s commitment to reshoring domestic industries and protecting our economic sovereignty. Without immediate action, Congress will hand China a $10+ billion refund and a receipt for American surrender. Tariffs remain the most strategic tool we have to revitalize American manufacturing, and it’s time for Congress to act.”

CPA Industry Analyst Kenneth Rapoza also recommended that Congress “remove China’s most favored nation status…[which] would immediately put China in the roughly 30% baseline tariff range. The existing Section 301 tariffs, first imposed by Trump in 2018 and extended for four years by the Biden administration in 2024, will stack on top of those, keeping China tariffs at 55%.”

I agree with the recommendation to revoke China’s most favored nation status, as I wrote about in my blog article of  June 2024, titled “Why We Must Revoke China’s Most Favored Nation Status.”  However, if the tariffs on Chinese imports are only temporary and at only a 30-55%% level, they won’t have the lasting effect needed to rebuild America’s industrial base.  In my opinion, the tariffs on China need to be made permanent at a high level (100-125%) to influence CEOs of American companies to decide to reshore manufacturing to America, expand existing plants, and/or build plants in new locations.  This action would truly set the stage to Make America Great Again.

Tags:,
Posted in Legislation, Trade Policy | No Comments »

Would the Benefits of Tariffs Outweigh the Threat of Increased Inflation

Tuesday, March 25th, 2025

On March 12, 2025, President Trump “imposed sweeping 25% tariffs on all steel and aluminum imported into the United States…” causing some economists to warn “that broad-based tariffs threaten to drive up prices on everything from food to new homes.” In answering the question of whether tariffs would increase inflation, we can consider whether or not inflation was increased by the imposition of Section 232 tariffs on steel and aluminum and the 301 tariffs levied on roughly half of U.S. imports from China, and we can consider the benefits achieved from these tariffs in 2018. 

Tariffs have traditionally had a two-fold purpose:  protect American manufacturers from unfair trade practices by mercantilist countries and stimulate domestic production. The Section 232 and 301 tariffs were aimed to protect the domestic steel and aluminum industries from what the government perceived as unfair competition and national security threats. Here are some benefits that were projected from these tariffs:

Section 232 Tariffs:

  1. Protection of Domestic Industries: By imposing tariffs on imported steel and aluminum, the U.S. government intended to protect and support domestic producers of these metals.
  2. Stimulating Job Growth: The tariffs were expected to create and maintain jobs in the U.S. steel and aluminum industries by making imported metals relatively more expensive compared to domestic products.
  3. Infrastructure Development: With a healthier domestic steel and aluminum industry, there was an expectation of increased capacity and capability to supply materials for critical infrastructure projects across the country.

Section 301 Tariffs:

  1. Addressing Intellectual Property Concerns: The Section 301 tariffs targeted imports from China and were aimed at addressing intellectual property theft and unfair trade practices in various industries, including steel and aluminum.
  2. Leveling the Playing Field: By imposing tariffs on Chinese goods, the U.S. sought to level the playing field for domestic steel and aluminum producers who may have been competing against subsidized Chinese products.
  3. Encouraging Fair Trade Practices: The tariffs were intended to push China towards adopting fair trade practices and addressing concerns related to market access, technology transfer, and intellectual property rights.

Here are some specific examples of how the Section 232 and 301 tariffs have benefited the U.S. steel and aluminum industries:

  1. Expanding Existing Plants:
    • Example: Nucor Corporation, a leading steel producer in the U.S., announced plans to invest $1.35 billion to build a new steel plate mill in Kentucky after the implementation of tariffs on steel imports under Section 232. This expansion will not only create more jobs but also increase production capacity, catering to the rising demand for steel products in the country.
  2. Building New Plants:
    • Example: Alcoa, a prominent aluminum producer, decided to restart its aluminum smelter in Evansville, Indiana, following the tariffs imposed on aluminum imports under Section 232. This move signifies a significant investment in building a new plant that will contribute to the growth of the domestic aluminum industry, providing employment opportunities and supporting the local economy.
  3. Adding Employees:
    • Example: U.S. Steel Corporation hired additional employees at its plant in Granite City, Illinois, in response to the tariffs imposed under Section 232. The increased demand for domestic steel prompted the company to bring back workers who were previously laid off and also recruit new talent to support the plant’s operations, showcasing the positive impact of tariffs on job creation within the industry.

Overall, the Section 232 and 301 tariffs have played a crucial role in revitalizing the U.S. steel and aluminum industries by encouraging investments in plant expansions, new construction projects, and workforce expansion, thereby fostering growth and competitiveness in these sectors.

Now, let’s examine whether or not these tariffs increased inflation since going into effect in 2018. The U.S. International Trade Commission (USITC) released the report,  Economic Impact of the Section 232 and 301 Tariffs on U.S. Industries in March 2023.  “It took an in-depth look at the effects of these tariffs on the importing industries and on industries dependent on them…over the years 2019 through 2021. In every one of the ten industries the authors studied, the 301 tariffs led to significant increases in domestic production.”  An article titled “USITC Report Shows Tariffs Boosted U.S. Production” by Jeff Ferry, Chief Economist of the Coalition for a Prosperous America, states that the key points of the report were:

  • “Section 301 and 232 tariffs boosted production in all twelve of the industries studied.
  • Price increases in the product categories targeted with tariffs were very small, in the 3%-4% range, contrary to mainstream media narrative.
  • Most of the tariffs targeted intermediate (industrial) goods. Downstream goods, including consumer goods, saw barely visible tariff-related price increases.
  • Downstream price increases due to steel and aluminum tariffs were estimated to be 0.2%.
  • Section 232 steel tariffs unleashed a huge wave of steel investment, likely creating some 20,000 direct jobs.
  • Tariffs are a valuable tool for generating growth in the U.S. economy.”

Since these tariffs were beneficial for the steel and aluminum industries, additional tariffs would be beneficial to other American manufacturing industries and help reduce our increasing trade deficits.

The Press Release on March 19, 2025 by the Coalition for  Prosperous America  titled:  “Importers Front-Run Global Tariffs; Deficit Expands a Record Breaking 34% in January” by Kenneth Rapoza states:

 “January imports rose 10% to $401.2 billion while exports rose at their usual pace, around 1% to $269.8 billion, according to the Bureau of Economic Analysis (BEA)…The January goods deficit is the biggest in years, if not ever.”

The top 10 deficit countries as measured inbillions of dollars were: “China ($29.7), the European Union ($25.5), Switzerland ($22.8), Mexico ($15.5), Ireland ($12.4), Vietnam ($11.9), Canada ($11.3), Germany ($7.6), Taiwan ($7.5) and Japan ($7.4).”

These high trade deficits explain why President Trump is proposing 25% tariffs on imports from China, Canada, and Mexico. 

On March 19, 2025, the Coalition for a Prosperous America released a memorandum titled “CPA Recommendations for Implementing Tariffs Pursuant to the America First Trade Policy” by Charles Benoit as a response to the Presidential Memorandum titled America First Trade Policy President Trump issued on his Inauguration Day.

It states: “CPA is strongly supportive of President Trump’s Trade and Tariff Agenda that seeks to broadly reindustrialize the United States and raise significant revenue as outlined in the America First Trade Policy Memorandum.”

“However, CPA cautions against adopting a reciprocal tariff strategy aimed primarily at negotiating lower foreign trade barriers and more favorable investment conditions abroad. A reciprocal tariff strategy that prioritizes foreign governments’ willingness to reduce their trade barriers or be more receptive to foreign investment is in conflict with the stated goals of the America First Trade Policy Memorandum and undermines the predictability and stability American businesses need to confidently invest in long-term domestic production.”

CPA offers the following recommendations as they relate to the use of tariffs for protection, for revenue, and for reciprocity.

Tariffs for Revenue:

  • CPA fully supports President Trump’s concept of a 10% to 20% supplemental, universal tariff. CPA estimates that even a modest 10% supplemental universal tariff would lead to $728 billion in economic growth and 2.8 million new jobs, while generating $263 billion in new federal revenue to pay for domestic tax cuts.

Tariffs for Protection:

  • Section 232 is an excellent Presidential tool for protecting American producers, and CPA applauds the Trump Administration for already initiating new Section 232 investigations on copper and lumber.
  • CPA believes it is essential that entire supply chains be considered for the successful deployment of tariffs. Conveniently, Sections I through XX (1 through 20) of the Harmonized Tariff System (HTS) are organized in this way. The Trump Administration should consider initiating a Section 232 review for each of Sections 1 through 20 of the HTS.

Tariffs for Reciprocity

Reciprocal tariffshaven’t worked to the benefit of the United States ever since the General Agreement on Tariffs and Trade (GATT) went into effect in 1948.  When the World Trade Organization was established in 1995, “every WTO Member, including the United States, has pledged maximum tariff rates applicable to every other WTO member…Under the WTO system, there’s no single maximum rate, but rather specific maximum rates — known as ‘bound rates’ — itemized across 5,000+ product categories. Bound rates for each WTO country are listed in that country’s ‘Schedules of Concessions,’ which is annexed to the General Agreement on Tariffs and Trade (GATT.)”

Supposedly level tariff rates haven’t prevented the United States from incurring an ever-increasing trade deficit with its trading partners because of mercantilist practices such as undervalued currency, subsidies to the manufacturing industries of the respective countries, intellectual property theft, and product dumping, among other practices. Thus, CPA concludes: “These reciprocity requirements have all failed while simultaneously pitting American producers against each other.” 

Instead,” CPA calls on the Trump Administration to either withdraw from the World Trade Organization entirely, or to “Unbound” the United States’ Schedule of Concessions to the GATT.”

The Trade and Tariffs page of the CPA website states, “The Coalition for a Prosperous America (CPA) has proposed a model that uses a simple, four-level structure of global tariffs at 0%, 15%, 35% and 55% (explained more in the document). CPA projects that this tariff would create 10 million new producer jobs, increasing real household incomes by 10%, grow the economy by 7% and generate $603 billion in new revenue. This revenue is more than sufficient to eliminate income taxes on the large majority of American wage earners.

The economic benefits of imposing tariffs on all imported goods can be summarized to be:

  1. Protection of domestic industries: Tariffs can protect domestic industries from foreign competition by making imported goods more expensive. This can help prevent job losses in sectors that are unable to compete with cheaper imports.
  2. Revenue generation: Tariffs can generate revenue for the government. The revenue collected from tariffs can be used to fund government programs, infrastructure projects, or reduce budget deficits.
  3. Trade balance improvement: By making imported goods more expensive, tariffs can help reduce imports and improve the trade balance of the country. This can help decrease trade deficits and strengthen the economy.
  4. Encouraging domestic production: Higher tariffs can incentivize businesses to produce goods domestically rather than importing them. This can lead to increased investment in domestic production facilities and create jobs.
  5. National security: Imposing tariffs on certain imported goods can also be used as a strategic tool to protect industries that are deemed critical to national security.

In my opinion, these benefits make tariffs an attractive alternative to the free-trade policies that have dominated the past 70 years of international trade. Protecting and encouraging more domestic production would increase manufacturing’s share of the Gross Domestic Product (GDP) and improve the financial wellbeing of many more Americans.  

Tags:,
Posted in Economy, Legislation, Manufacturing, Trade Policy | No Comments »

What Executive Orders has President Trump Signed to Help Rebuild American Manufacturing?

Tuesday, January 28th, 2025

In his first week in office, President Trump has already signed several Executive Orders that will implement various strategies to support and enhance the manufacturing sector in the United States.  This article highlights the E.O.s that relate to the orders I recommended in my December article, “Rebuilding American Manufacturing Through Executive Orders.”

The White House website provides a detailed list of Executive Orders that President Trump signed in the first 100 hours of his second term as president.  The introduction highlighted the following:

  • “President Trump declared a National Energy Emergency to unlock America’s full energy potential and bring down costs for American families.
  • President Trump rescinded every one of Joe Biden’s industry-killing, pro-China, and anti-American energy regulations, empowering consumer choice in vehicles, showerheads, toilets, washing machines, lightbulbs, and dishwashers.
  • President Trump withdrew the United States from the disastrous Paris Climate Agreement that unfairly ripped off our country.
  • President Trump terminated Biden’s harmful electric vehicle mandate.”

The most important Executive Order that will benefit American manufacturing is AMERICA FIRST TRADE POLICY, signed January 20, 2025

The following provisions specifically take the actions that I recommended in my December article to begin to protect manufacturers from unfair trade practices.

Sec. 2.  Addressing Unfair and Unbalanced Trade.  (a)  The Secretary of Commerce, in consultation with the Secretary of the Treasury and the United States Trade Representative, shall investigate the causes of our country’s large and persistent annual trade deficits in goods, as well as the economic and national security implications and risks resulting from such deficits, and recommend appropriate measures, such as a global supplemental tariff or other policies, to remedy such deficits.

(h)  The Secretary of Commerce shall review policies and regulations regarding the application of antidumping and countervailing duty (AD/CVD) laws, including with regard to transnational subsidies, cost adjustments, affiliations, and “zeroing …

(i)  The Secretary of the Treasury, the Secretary of Commerce, the Secretary of Homeland Security, and the Senior Counselor for Trade and Manufacturing, in consultation with the United States Trade Representative, shall assess the loss of tariff revenues and the risks from importing counterfeit products and contraband drugs, e.g., fentanyl, that each result from the current implementation of the $800 or less, duty-free de minimis exemption under section 1321 of title 19, United States Code, and shall recommend modifications as warranted to protect both the revenue of the United States and the public health by preventing unlawful importations.

Sec. 3. Economic and Trade Relations with the People’s Republic of China (PRC).

b)  The United States Trade Representative shall assess the May 14, 2024, report entitled “Four-Year Review of Actions Taken in the Section 301 Investigation:  China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation” and consider potential additional tariff modifications as needed under section 2411 of title 19, United States Code — particularly with respect to industrial supply chains and circumvention through third countries, including an updated estimate of the costs imposed by any unfair trade practices identified in such review — and he shall recommend such actions as are necessary to remediate any issues identified in connection with this process.

(d)  The Secretary of Commerce and the United States Trade Representative shall assess legislative proposals regarding Permanent Normal Trade Relations with the PRC and make recommendations regarding any proposed changes to such legislative proposals.”

I was hoping that he would immediately issue an Executive Order to implement the 10 and 20 percent blanket tariff on all U.S. goods imports and at least a 60 percent tariff on all Chinese goods. It’s also important to expand Section 232 tariffs to other key industries besides steel and aluminum.

In a press release of January 24, 2025, “The Coalition for a Prosperous America (CPA) has formally called on President Trump to take immediate action to address Mexico’s ongoing violations of its commitments under the 2019 Joint Steel and Aluminum Agreement. In a letter delivered to the White House today, CPA urged the reinstatement of Section 232 tariffs on Mexico and outlined a series of measures to strengthen the U.S. steel and aluminum industries, which are being severely undermined by surging imports from Mexico and other nations.”

Another very important Executive Order UNLEASHING AMERICAN ENERGY EXECUTIVE ORDER, signed January 20, 2025, addresses my recommendation to provide access to affordable energy.  Key provisions are:

“Sec. 2.  Policy.  It is the policy of the United States:

(a)  to encourage energy exploration and production on Federal lands and waters, including on the Outer Continental Shelf, in order to meet the needs of our citizens and solidify the United States as a global energy leader long into the future;

(b)  to establish our position as the leading producer and processor of non-fuel minerals, including rare earth minerals, which will create jobs and prosperity at home, strengthen supply chains for the United States and its allies, and reduce the global influence of malign and adversarial states;

(c)  to protect the United States’s economic and national security and military preparedness by ensuring that an abundant supply of reliable energy is readily accessible in every State and territory of the Nation;”

I was delighted to see that he signed this Executive Order that would allow us to dramatically increase energy production” to reduce energy costs  as it will be a great benefit to American manufacturers.

Another important Executive Order was REMOVING BARRIERS TO AMERICAN LEADERSHIP IN ARTIFICIAL INTELLIGENCE on January 23, 2025

Section 1. Purpose. The United States has long been at the forefront of artificial intelligence (AI) innovation, driven by the strength of our free markets, world-class research institutions, and entrepreneurial spirit. To maintain this leadership, we must develop AI systems that are free from ideological bias or engineered social agendas. With the right Government policies, we can solidify our position as the global leader in AI and secure a brighter future for all Americans.

This order revokes certain existing AI policies and directives that act as barriers to American AI innovation, clearing a path for the United States to act decisively to retain global leadership in artificial intelligence.

Sec. 4. Developing an Artificial Intelligence Action Plan. (a) Within 180 days of this order, the Assistant to the President for Science and Technology (APST), the Special Advisor for AI and Crypto, and the Assistant to the President for National Security Affairs (APNSA), in coordination with the Assistant to the President for Economic Policy, the Assistant to the President for Domestic Policy, the Director of the Office of Management and Budget (OMB Director), and the heads of such executive departments and agencies (agencies) as the APST and APNSA deem relevant, shall develop and submit to the President an action plan to achieve the policy set forth in section 2 of this order.

Artificial Intelligence (AI) is very important to helping American manufacturers implement the Industry 4.0 technologies of automation, robotics, supply chain management, production planning, forecasting and creating digital twins.  Utilization of these technologies helps American manufacturers be more competitive in the global marketplace.

The White House website also quoted the initial reactions of key industrial organizations to President Trump’s Executive Orders as follows:

The Steel Manufacturers Association: “President Trump has repeatedly demonstrated his strong support for American steel workers. He reiterated that support on day one by directing his agencies to investigate unfair trade and its impact on domestic manufacturing.”

American Fuel & Petrochemical Manufacturers President and CEO Chet Thompson: “President Trump promised to end gas car bans and vehicle mandates on Day 1 of his new administration, and we are pleased to see that work already underway. Thank you, President Trump.”

American Petroleum Institute President and CEO Mike Sommers: “Americans sent a clear message at the ballot box, and President Trump is answering the call on Day 1. U.S. energy dominance will drive our nation’s economic and security agenda. This is a new day for American energy, and we applaud President Trump for moving swiftly to chart a new path where U.S. oil and natural gas are embraced, not restricted.”

Job Creators Network CEO Alfredo Ortiz: “Trump’s two-fold approach of boosting oil and gas production and repealing the Biden administration’s green energy mandates will make American energy cheaper, reliable and more efficient.”

In his Remarks delivered via teleconference to the World Economic Forum on January 23, 2025, President Trump stated some of the other things he has done that will benefit American manufacturing:

“I terminated the ridiculous and incredibly wasteful Green New Deal — I call it the “Green New Scam”; withdrew from the one-sided Paris Climate Accord; and ended the insane and costly electric vehicle mandate.  We’re going to let people buy the car they want to buy. 

     I declared a …national energy emergency to unlock the liquid gold under our feet and pave the way for rapid approvals of new energy infrastructure.  The United States has the largest amount of oil and gas of any country on Earth, and we’re going to use it. 

     Not only will this reduce the cost of virtually all goods and services, it will make the United States a manufacturing superpower and the world capital of artificial intelligence and crypto.

     My administration has also begun the largest deregulation campaign in history, far exceeding even the record-setting efforts of my last term. 

     In total, the Biden administration imposed $50,000 in additional regulatory costs on the average American household over the last four years.  I have promised to eliminate 10 old regulations for every new regulation, which will soon put many thousands of dollars back in the pockets of American families.”

President Trump is off to a good start towards achieving his goal to Make American Great Again by rebuilding American manufacturing to strengthen our country’s economic resilience and end dependence on foreign nations. These actions will protect our national security and create a more prosperous future for our country now and for our children and grandchildren.

Tags:,
Posted in Energy, General, Manufacturing, Trade Policy | No Comments »

What Legislation Should Congress Pass to Help Rebuild American Manufacturing?

Tuesday, January 14th, 2025

Now that the 119th Congress began less than two weeks ago, the priorities for Republican who have a slight majority in Congress on passing legislation that fulfills their campaign promise to support President’s Trump goal to Make America Great Again.  To achieve this goal, Congress must pass legislation that helps rebuild American manufacturing.

As a reminder of why this is critical, manufacturing is the foundation of the middle class because manufacturing jobs pay higher wages than most service and retail jobs, enabling more American to move into the middle class during the 1900s. Manufacturing employment was at an all-time peak of 19.6 million in June 1979, representing 22 percent of the labor force. The loss of millions of manufacturing jobs in this century has resulted in a shrinking middle class. The loss of these jobs also means a loss of tax revenue, increasing our national debt.

The domestic manufacture of innovative new technologies is what enabled the United States to become the leader of the free world.  A secure domestic manufacturing supply chain is critical to maintaining our national sovereignty to remain a free country. We need to rebuild American manufacturing to create prosperity for our children and grandchildren.  

Here are my suggestions for legislation that should be passed by Congress in order of importance:

Impose a Market Access Charge (MAC) as proposed by Dr. John R Hansen, (PhD economist and  Economic Advisor, The World Bank (retd.)  “forcing foreigners to pay a market access charge (MAC) if they want to dump their speculative money into America’s financial markets when US trade deficits show that the global demand for dollars and dollar-based assets like stocks and bonds is already excessive. In addition to encouraging the dollar to move to a more competitive level, thus boosting economic growth and family incomes, the MAC could also generate hundreds of billion dollars of new government revenue per year.

The MAC would start low, rise gradually until foreign demand for dollars was consistent with balanced trade, and thereafter be adjusted periodically to maintain balanced trade. The MAC charge, which is fully legal under US and international law… Even a very low rate of say 1.5 percent, the MAC, which would be paid entirely by foreign speculators, not Americans, could generate over $1 trillion dollars of new revenue per year. This could gradually be used to eliminate the U.S. deficit…and to start paying down America’s total internal and external debts.

John emailed me this comment: “We should regard the MAC as a tariff on the import of foreign money — just as regular tariffs are a tax on the import of foreign goods. A MAC tariff would create millions of new, well-paying jobs and would give the U.S. Government billons of additional revenues, all paid out of the pockets of foreigners, that could be used to:

  1. increase the quality and adequacy of government services for all Americans.
  2. reduce the burden of taxes paid by Americans.

Note that, unlike traditional tariffs on imports which increase U.S. prices, especially in the short term, the MAC would be paid entirely by foreigners. Furthermore, unlike tariffs that only restrict imports (by making them more expensive for Americans), the MAC would also stimulate exports and American jobs by making made-in-America products more competitive in foreign markets.

The American jobs that the MAC would create would emerge not only in crowded urban areas, but also in the poverty-stricken regions of America where, as President Trump mentioned in his 2017 inaugural address, “rusted-out factories are scattered like tombstones across the landscape of our nation,” especially affecting the poor workers who lost their jobs due to the China Shock.

Likewise, by making grown-in-America food and other agricultural products more competitive with competing foreign goods, the MAC would help reverse the sharp deterioration of family incomes on American farms and ranches.

Finally, passing legislation for the MAC would also help America reduce its mountain of government debt — debt that threatens the stability of our country today and the quality of life for our children tomorrow.”

Pass a Patent Reform Bill to restore inventors’ rights and end abuses by the Patent Trial and Appeal Board (PTAB). 

The largest inventors’ organization, US Inventors, supported the passage of the following bill in the last session of Congress:  HR 8134, the Restoring America’s Leadership in Innovation Act (RALIA), introduced by Rep. Thomas Massie (R-KY) and Rep. Marcy Kaptur (D-OH).

RALIA sought to revitalize patent protection by restoring injunctive relief, eliminating confusing judicially created eligibility tests, and abolishing the Patent Trial and Appeal Board (PTAB). RALIA would have reversed the effects of several Supreme Court decisions and of the America Invents Act, largely repairing most of the erosion of US patent rights accumulated over the last several decades. US Inventors urges Congress to pass the reintroduction of this bill in this session of Congress.

It would be nice for the USPTO to get refocused on its mission to ensure that the intellectual property system contributes to a strong global economy, encourages investment in innovation, and fosters an entrepreneurial spirit.

Revoke China’s Most Favored Nation Status (aka Permanent Normal Trade Relations (PNTR)

After President Clinton granted China Most Favored Nation Status annually from 1995 on, the U.S.Senate voted to give China permanent most-favored-nation status on September 19, 2000, and on October 10th, 2000, President Clinton signed into law the U.S.-China Relations Act of 2000. This paved the way for China’s accession to the World Trade Organization.  This started the trend of American manufacturers moving manufacturing to Chinese vendors and the huge influx of imported good from China flooding the U.S. when tariffs were drastically reduced.

Our trade deficit with China increased every year from $83.8 Billion in the year 2000 to $279.1 Billion in 2023 (projected to be about the same for 2024). This was down from a peak trade deficit with China in 2018 of $418.2 Billion.

In my article, “We must Revoke China’s Most Favored Nation Status, I wrote that during the 118th Congress, “several bills have been introduced to revoke or modify China’s Most Favored Nation (MFN) status, also known as Permanent Normal Trade Relations (PNTR)” but none of the bills were passed out of Committee to be voted on by the House or Senate.

Passing such a bill should be a major priority for the 119th Congress as soon as possible. Without PNTR status, all products from China would by default be subject to higher tariffs. This would reduce off-shoring by discouraging American investors and corporations from doing business in China. It would increase reshoring and diminish demand for Chinese goods, bolstering the sales of American manufactured products.

Reduce the Allowed Value of De Minimis imports

De Minimis imports was codified in Section 321 of the Tariff Act of 1930 as an administrative exemption for imports under $1. However, the Trade Facilitation and Trade Enforcement Act of 2015, signed by President Barack Obama Feb. 24,  2016, “ raised the value of a shipment of merchandise imported by one person on one day that generally may be imported free of duties and taxes from $200 to $800.

This allows foreign vendors, such as Temu, Shein, and Amazon vendors, to ship directly into the United States. When a package receives de minimis treatment, it arrives without the need of a customs broker or bond, without paying any tariffs or taxes, and without meaningful possibility of regulatory oversight.

The Coalition for a Prosperous America states: “U.S. companies and workers are subjected to a new level of job-destroying competition. Illicit drugs, such as fentanyl, and counterfeit goods are shipped directly to US consumers while evading detection. The predictable result is a major calamity putting U.S. producers and traditional retailers out of business and destroying jobs.” CPA urges “Congress to lower the de minimis threshold to $9 among other reforms.”

Reauthorize a Reformed Tax Cuts and Jobs Act (TCJA)

Major provisions of the Tax Cuts and Jobs Act of 2017 will expire by the end of 2025, so American families and business could experience dramatic increases in taxes in 2026.

Since manufacturers require affordable taxes to succeed and grow, reform and reauthorization of TCJA is imperative.

The Tax Foundation recommends that Congress “prioritize provisions that have the largest “bang for the buck,” or the most economic growth per dollar of revenue loss. These include immediate cost recovery for investments in the types of machinery and equipment upon which millions of small and large businesses depend, as well as immediate write-offs for investments in research and development. These two policy changes support a growing economy like no other tax policies proposed since the corporate tax rate was reduced from 35 percent to 21 percent.”

While the reduction in corporate taxes was a big benefit to large corporations, it was actually a tax increase from 15% to 21% for small business and small manufacturers.  The fabrication companies I represent as a sales rep all saw this increase in their corporate taxes because they generated revenues under $10 million a year.

President Trumps’s proposal for a 15% corporate tax rate should be seriously considered.  Read the Cato Institute’s “The Case for Trump’s 15 Percent Corporate Tax Rate” here. 

Pass Legislation to Address China’s Exploitation of U.S. Capital Markets, Economic Incentives, and Trade Policy

Several bills to address the problem of China’s exploitation of U.S. capital markets were introduced in the 118th Congress, but none of them were passed out of committee to be voted on by the House or Senate. For a full list of this legislative package, go to this link of the website of the Coalition for a Prosperous America (CPA) as there is insufficient space in this article to describe all of these bills.  All of these bills will have to be introduced in the 119th Congress.  As a long-time member of CPA, I join them in urging Congress to pass a legislative package that will “prohibit U.S. capital, economic incentives, and trade preferences from benefitting China and other adversarial nations.” 

Passage of the legislation mentioned in this article would help stop the destruction of American industry and innovation, the loss of high-paying manufacturing jobs, and the collapse of communities. It would d be a big help in rebuilding American manufacturing’s capacity and eliminate dependence on China and other adversarial nations.  It would especially help rebuild manufacturing capacity in industries that are critical to U.S. economic and national security. It would help to create prosperity for our children and grandchildren and ensure that they will continue to live in a free country. 

Tags:, ,
Posted in Economy, General, Manufacturing, Patent Reform, Taxes/Regulations, Trade Policy | No Comments »

« Older Entries