Posts Tagged ‘American manufacturing’

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What is the Status of Legislation that Would Help Rebuild American Manufacturing?

Tuesday, May 26th, 2026

This past January, I wrote an article titled, “Has the 119th Congress Passed Legislation to Help Rebuild American Manufacturing?” in which I gave an update on whether or not Congress passed any of the legislation I had recommended in my article of January 2025, “What Legislation Should Congress Pass to Help Rebuild American Manufacturing?  to fulfill their campaign promise to support President’s Trump goal to Make America Great Again and help rebuild American manufacturing. 

We are now nearly six months later, so it’s time to examine if any of the bills I recommended have passed. 

Number one on my list was legislation to establish a Market Access Charge (MAC), defined as a proposed fee on foreign purchases of U.S. financial assets (like stocks, bonds, and treasuries)—intended to manage large capital inflows, influence exchange rates, and promote economic stability. This is a concept promoted by some economists and organizations like the Coalition for a Prosperous America (CPA).

Legislative Activity:

  • As of May 2026, no bill specifically titled “Market Access Charge” or directly imposing such a charge has been introduced in the 119th Congress (2025–2026).
  • The concept is discussed in economic policy circles but has not yet reached the stage of formal legislation.
  • Related proposals may occasionally surface in hearings or working papers, but have not led to a standalone bill. Senate Finance and House Ways and Means Committees have occasionally heard testimony on capital flows and financial stability, where the MAC is sometimes raised, but to date there is no active bill establishing a MAC.

2. H.R. 5811 – Restoring America’s Leadership in Innovation Act of 2023 (RALIA)

  • Status: Introduced 10/24/2025 by Rep. Thomas Massie (R-KY) with Rep. Marcy Kaptur (D-OH)
  • Summary: This bill aims to reform the U.S. patent system, making changes to post-grant proceedings and patent eligibility.
  • Latest Action: As of May 2026, H.R. 5811 was introduced in the House and referred to the House Committee on the Judiciary. No further action (such as a hearing or vote) has been reported.

3. H.R. 694 – The Restoring Trade Fairness Act

  • Status: Introduced January 23, 2025 Rep. John Molenaar (R-MI)
  • Summary: A bill to address perceived unfair trade practices, particularly relating to China.
  • Latest Action: H.R. 694 was introduced and referred to the House Committee on Ways and Means. There have been no further reported actions or movement out of committee.

3. S. 206 – The Restoring Trade Fairness Act

  • Status: Introduced on January 23, 2025 by Sen. Tom Cotton (R-AR)
  • Summary: Companion bill to H.R. 694 in the Senate.
  • Latest Action: S. 206 was introduced and referred to the Senate Committee on Finance. No additional reported activity at this time.

4. Legislation to Reduce the Allowed Value of De Minimis Imports

  • Status:  Multiple bills have been introduced in Congress to reduce the de minimis threshold (the value below which imports can enter the U.S. duty-free and with minimal documentation).
  • Latest Action: None have passed either chamber or advanced beyond committee.

5. S. 1053 – FIGHT China Act of 2025

  • Status: Introduced on March 13, 2025 by Sen. John Cornyn (R-TX).
  • Summary: This bill is aimed at countering economic and national security threats posed by China.
  • Latest Action: Introduced and referred to the Senate Committee on Finance. No additional major actions have been reported.

6. H.R. 3946 – FIGHT Act of 2026

  • Status: Introduced on March 13, 2025 by Rep. Andy Barr (R-KY)
  • Summary: Similar in intent to S. 1053, but focuses on U.S.-China relations and economic policy.
  • Latest Action: Referred to the House Committee on Ways and Means. Awaiting further action.

7. S. 1357 – SAFE Act (Secure America’s Financial Exchanges Act)

  • Status: Introduced April 8, 2025 by Rep. Rick Scott (R-FL) Marsha Blackburn (R), Bill Cassidy (R), Cindy Hyde-Smith (R), and John Neely Kennedy (R) are co-sponsors.
  • Summary: Seeks to ensure the security and integrity of U.S. financial exchanges.
  • Latest Action: Referred to the Senate Committee on Banking, Housing, and Urban Affairs. No additional committee activity reported.

8. S. 1358 – TASK Act (Transaction and Sourcing Knowledge Act)

  • Status: Introduced
  • Summary: Aims to improve the transparency of financial transactions crossing U.S. borders.
  • Latest Action: Referred to the Senate Committee on Banking, Housing, and Urban Affairs. No further movement to date.

Summary Table

Bill NumberTitleLatest StatusCommittee
H.R. 5811Restoring America’s Leadership in Innovation ActReferred to JudiciaryHouse Judiciary
H.R. 694Restoring Trade Fairness ActReferred to Ways & MeansHouse Ways & Means
S. 206Restoring Trade Fairness ActReferred to FinanceSenate Finance
    
S. 1053FIGHT China Act of 2025Referred to FinanceSenate Finance
H.R. 3946FIGHT Act of 2026Referred to Ways & MeansHouse Ways & Means
S. 1357SAFE ActReferred to BankingSenate Banking
S. 1358TASK ActReferred to BankingSenate Banking

You can use the links provided for each bill to read the bill text, see the sponsors and cosponsors, view all actions and amendments, and sign up for alerts by creating a free account on Congress.gov. These Congress.gov pages are updated in real time.

There was one bill that I had overlooked previously:  S.99 – Strengthening Support for American Manufacturing Act introduced into the Senate on January 15,2025 by Sen. Gary Peters (D-MI).

“This bill requires the Department of Commerce to contract with the National Academy of Public Administration to study and report on the offices and bureaus of the department that are relevant to critical supply chain resilience and manufacturing and industrial innovation.

The report must evaluate the purpose, statutory authority, effectiveness, efficiency, and limitations of each such office and bureau and provide recommendations to improve their effectiveness, efficiency, and impact.” This bill passed the Senate on October 23, 2025 without amendment by Unanimous Consent, but hasn’t been voted on by the House. 

It’s not enough just to introduce a bill; the bill’s sponsor needs to recruit as many co-sponsors as possible to gain support to hold committee hearings so that the bill can get enough votes to be passed out of committee for a vote by the House or Senate. Then, the sponsors and co-sponsors have to work to gain enough support for the bill to pass the House and Senate.

We need to stop the destruction of American industry and innovation, the loss of high-paying manufacturing jobs, and the collapse of communities. The bills listed above would be a big help in rebuilding American manufacturing’s capacity and eliminate dependence on China. They would help rebuild manufacturing capacity in industries that are critical to U.S. economic and national security. They would help to create prosperity for our children and grandchildren and ensure that they will continue to live in a free country. 

Because of the shorter legislative cycle caused by the mid-term elections in November, we only have a few months for Congress to pass these critical bills.  Each of us needs to pick one of the above bills that we support and then call our Congressional Representative and Senator to urge them to support that bill. 

Remember, “We the People” are supposed to be 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.  If we want to remain an independent country, we need to be citizen activists and urge our elected Representatives not to allow us to become an economic vassal state of China.

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The Globalization Trap: Reclaiming American Prosperity

Wednesday, April 29th, 2026

Michael Collinsadded to his extensive body of work as an American Manufacturing advocate with a fifth book, The Globalizaton Trap: Reclaiming American Prosperity.  This book is about “how neoliberalism and globalization were adopted by American Corporations and the U.S. government and how they radically changed the American economy and exploited the working class…globalization and the rise of neoliberalism as a political ideology turned out to be a trap where the average middle-class citizen bore the brunt of the economic changes through job losses, stagnant wages, and not being able to keep up with inflation.”

The preface sates: “From 1940 to 1980 the growth of the middle class increased with productivity growth and all boats rose with the tide.  He explains that “Neoliberalism is an ideology that emphasizes globalism, free trade, and letting the markets regulate the economy…The resultant deindustrialization has led to the decline of the middle class, and sacrificing jobs, industries, technologies, suppliers, and communities.”

Chapter One, “The Rise of Neoliberalism,” describes how Milton Friedman and Frederick Hayek developed a new theory called neoliberalism.” Neoliberalism is an ideology that emphasizes globalism, free trade, privatization, and deregulation.  Neoliberalism was a 180-degree reversal from Keynesian economics used in the New Deal…”  It incorporated Freidman’s dictum “An entity’s greatest responsibility lies in the satisfaction of the shareholders.”  

I believe this theory is fallacious because recent data from the U.S. Small Business Administration (SBA), shows that “approximately 98% to 99% of American manufacturing firms are privately owned” and “98.6% are classified as small businesses (fewer than 500 employees),” meaning that less than 2% of companies are benefiting. which Michael calls Multi-National Corporations (MNCs).

Also, “Neoliberalism was the theoretical foundation for radical economic changes and was closely connected to the strategy of outsourcing and globalization.”

He then documents the role Presidents Ronald Reagan, Bill Clinton, George W. Bush, and Barack Obama played in advancing neoliberalism and globalism. He concludes the chapter writing that “The good news is that the era of neoliberalism, free trade, and globalism is coming to an end.”

Chapter Two, “The Middle-Class Decline,” quotes a Pew Research Center analysis of government data, showing that “the middle class, has steadily contracted in the past five decades. The share of adults who live in middle-class households fell from 61 percent in 1971 to 50 percent in 2021.”  He attributes the decline to the following major reasons:

  • Automation
  • Outsourcing
  • Job losses in manufacturing (since 1979, 7.5 million jobs were lost due to automation and outsourcing)
  • Trade Agreements
  • Decline of Unions
  • Deregulation of Financial Industry
  • Rising prices for essential costs like housing, energy. health care, education, and food

In Chapter 3, “Winners and Losers in the Free Market,” he shows how globalization and free trade has led to: worker insecurity, abandonment of cities and towns in the Heartland, middle class despair, and evidence of the failure of the Service Economy.  As a result, he writes “since 1990, job quality as measured by the income earned by workers, has significantly declined. Less hours worked with less pay and little room for growth is becoming the norm.”

In Chapter four, “The Decline of American Manufacturing,” he presents these facts:

  • “U.S. manufacturing has fallen from 21 to 25 percent of Gross Domestic Product, in the 1950s to about 10 percent today.”
  • “American manufacturers have lost 11 percent of our domestic market since China was given most favored nation status in 2002 [now down to a Domestic Market Share Index of 66.9 percent.”
  • “In 1979, manufacturing jobs represented approximately 22% (19.7 million) of the total U.S. nonfarm workforce. By 2025, that figure had fallen to about 8% (12.7 million).”

He discusses why economists don’t think manufacturing is important to the U.S. economy, the damage caused by granting China Most Favored Nation Status (MFN), Free Trade Agreements, and outsourcing.  He concludes the chapter with a discussion of Why America must have a strong and growing manufacturing sector, much of the information corroborating information I have included in my three books and hundreds of blog articles.  I agree with his declaration, “The decline of manufacturing is the high price we pay for cheap imports.”

Chapter five, “The Disintegration of American Industry” discusses what has happened to the critical sectors of the manufacturing industry that all other manufacturing industries depend on, such as machine shops, tool and die makers, Industrial mold companies, Ferrous, Iron, Steel Foundries, Nonferrous Foundries, Forging and stamping shops, Cutting tool accessories, and the plastic and rubber industries.

Representing manufacturers in these sectors is how I have made a living as a sales representative for over 40 years, so I have personally experienced the decline of these manufacturing industry sectors.

He also documents the decline in other industries, such as automobiles, shipbuilding, semiconductors, magnetic media, communications equipment, paper, textile and apparel, ceramics, pottery, tile, hardware, cutlery and hand tools.  I agree with his two major conclusions: “We won’t remain the number one economy and a world power if we allow the continued disintegration of American manufacturing industries and transition to the postindustrial service economy, and we can’t maintain national security and weapon systems if materials like aluminum, steel, and rare earth have shortages and cannot be controlled by the United States.”

In Chapter Six, Michael opines that the policy of Globalization that led to deindustrialization, redistribution of wealth, stagnant wages, the decline of living standards, and insecurity not experienced for generations, resulted in the backlash that resulted in the election of Donald Trump as President in the 2024 election when the middle class voted for their pocketbook.

In conclusion, he recommends, “If we are to have a chance of reducing inequality and reindustrializing the country, the United States needs a more robust industrial policy that protects key industries, manufacturing jobs…with a general goal of increasing manufacturing’s share of GDP to at least 15 percent. Perhaps the best solution is for millions of workers who are struggling financially to vote out their congressional representatives and elect politicians that are more sympathetic to the middle-class problems.”

In Chapter 7, “Protecting our Technologies,” he poses the question “How many technologies and industries are we willing to lose, before we lose our ability to compete using innovation as our primary strategy?”  He describes the problem and then examines the pros and cons of outsourcing. He discusses the importance of protecting the Advanced Technology Industries (ATIs), which are at the forefront of economic growth.

Chapter 8, “Critical Minerals and Metals Shortages,” is a well-documented and thorough discussion of this major problem. Two glaring statistics stood out the most:

  • “The United States remains fully import-dependent for rare earths and 14 critical minerals and more than 50 percent dependent for another 34.
  • The United States currently imports roughly half, or about 47 percent, of the aluminum consumed in the United States.”

Michael provides suggestions to solve these problems that are too complex and numerous to cite.  You will have to read them yourself.

The shortages of American-made pharmaceuticals are equally if not more critical than minerals and metals, and this topic is thoroughly discussed in Chapter 9. Two points to ponder are:

  • “The United States is dependent on imports for two-thirds of generic medicines, which are 90 percent of all prescriptions.
  • In 2002, U.S. manufacturers produced 84 percent of domestically consumed pharmaceuticals. In 2023, the number declined to 37 percent of the domestic market.”

He concludes, “The collapse of U.S. pharmaceutical manufacturing is the result of decades of free trade, increased market penetration due to state-sponsored subsidies and dumping, and the absence of government protection or and industry strategy.” Michael proposes a number of solutions that you need to read for yourself.

Chapter 10 discusses the many other industries and products that are also facing shortages, such as semiconductors, auto parts, rechargeable batteries, aviation components, solar panels, magnets. Michael asserts” Losing control of the supply of many critical products has made us susceptible to price manipulation and economic extortion…we must reclaim supply chains from China and other countries for everything from pharmaceuticals to semiconductors. I don’t think it is possible without some kind of monetary pressure on:

  • U.S. companies to reshore products
  • Foreign countries to reduce exports to the United States, running surpluses, manipulating currencies and dumping products into the United States below their production costs
  • The government to help find new sources of products that can’t be sourced from the United States.”

Chapter 11 discusses the role the overvalued U.S. dollar and finalization of the economy have played in the globalization trap. The concepts of the value of the dollar, currency manipulation, and unfair trade practices by China are too complex to describe in this article. I like his support for a Market Access Charge to balance the value of the dollar and achieve a current account balance within five years, about which I have written articles previously.

Chapter 12, “How Will We Solve the Problems Caused by Free Trade Policies,” Michael writes. “America must abandon free trade and globalism, bring manufacturing back to the United States, reduce our trade deficit, and protect our industries and technologies. We will also have to incentivize U.S. multinationals to stop outsourcing and incentivize both foreign and U.S. companies to establish manufacturing operations within the United States.” 

After summarizing the main problems caused by free trade policies, he concludes, “I think it can be done and will require a combination of tariffs, tax credits, quotas, selecting key industries, and adjusting the value of the dollar.”

In Chapter 13, “Productivism – A Plan for American Manufacturing,” he explains that “A new economic policy that favors production and investment is called “productivism.” The term was invented by Dani Rodrik of Harvard…Productivism is a supply side strategy to boost the most productive industries so it is important to select and prioritize the key industries that must be protected. “

He states, “Productivism using tariffs, tax credits, quotas, key industries, technology protection and training will generate economic growth, create jobs, raise household incomes, and with a forecasted one-time increase in consumer prices. But productivism also needs to be part of a federal plan that defines the goals and measurable objectives.”

With regard to tariffs. Michael echoes what I have expressed, “Tariffs are the first step in developing a new industrial policy…If using tariffs to incentivize U.S. corporations to reshore products is to work, the government must convince the corporations that tariffs are permanent and that the government is in it for the long haul.” He reminds us that “In fact, the U.S. tariffs averaged 30 to 40 percent from 1890 to 1945.”

The rest of the chapter discusses the pros and cons of tax credits, tax incentives, quotas, and protecting key industries.  Then he asks the question: “Where Will We Find the Workers?He cites that “A recent study by Deloitte and the Manufacturing Institute found that U.S. manufacturing could need as many as 3.8 million new employees by 2033, and nearly 2 million of those jobs could be left unfilled.”  The rest of the chapter provides suggestions on how to solve this problem

Chapter 14, “Economic Factors that Must Be Considered to Make the Trump Plan Work,” outlines the following factors and provides suggestions on how to address these factors:

  • Decline in federal basic research
  • Loss of Technology Dominance
  • Capital investment and Stock Buybacks
  • Growth of National Debt
  • Transshipping to Avoid Tariffs
  • Banning Specific Products or Specific Companies
  • Artificial Intelligence and Additional Energy

In Chapter 15, “Refloating the Boats – What do we Have to Do to Grow the Middle Class?” Michael summarizes some of the points he wrote about in previous chapters.  Then, he posed the question: “is it still possible for the average worker to attain the American Dream and can the decline of the middle class be reversed? He states, “I think it is possible to grow the middle class, increase wages, and improve living standards and income for much of the middle class if the country can commit to production, not consumption.” This book was an easy read and holds your attention right up to the end.  I highly recommend this book to everyone who is concerned about the future of the manufacturing industry, the decline of the middle class, and our country’s ability to protect our national security.  Every Senator and Congressional Representative needs to read this book.  I suggest you buy one book for yourself and one to give to your Representative.

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Posted in Economic Development, Manufacturing, Trade Policy | No Comments »

Companies Reshoring Receive Awards for 9th Year

Tuesday, March 31st, 2026

For the past three decades, outsourcing was the cornerstone of U.S. manufacturing. First, manufacturers outsourced to Mexico, Puerto Rico, and the Philippines.  Then, manufacturers started outsourcing to China after it was granted Most Favored Nation status in the year 2000.  As I have written in my three books and over 300 articles, returning manufacturing to America is critical to rebuilding America’s industrial base. This process became known as “reshoring” after Harry Moser founded The Reshoring Initiative in early 2010. Returning manufacturing to America through reshoring is critical to rebuild America’s industrial base to ensure that we have the commercial and military/defense products needed to keep Americans healthy and safe

I had the honor of being an early supporter/collaborator of The Reshoring Initiative after I wrote about why it was important to understand “Total Cost of Ownership” when selecting vendors to manufacture products.  I based my opinion on the hard copy worksheets of the National Tooling & Machining Association and the American Mold Builders Association. Harry Moser called me after reading my article and told that he had just founded The Reshoring Initiative and “created the Total Cost of Ownership Estimator® – a free online tool that helps companies account for all relevant factors — overhead, balance sheet, risks, corporate strategy and other external and internal business considerations — to determine the true total cost of ownership.” He trained me in how to give presentations on TCO and authorized me to be a substitute speaker for him on the West Coast or when he had a scheduling conflict for a trade show or conference. Every year, Harry provides me with new data so that my presentations remain consistent with his presentations.

The good news is that reshoring is rapidly increasing and making a significant impact on U.S. manufacturing, driven by supply chain resilience, geopolitical risks, and government incentives. According to the 2024 Reshoring report by The Reshoring Initiative, “244,000 jobs were announced in 2024; 1.7 million jobs have been filled since 2010.” Reshoring is improving our country’s self-sufficiency capacity for goods essential to our economy and national security according to a number of surveys and reports that I highlighted in my article titled, “Is Reshoring Making a Difference and Increasing?” published March 19, 2025.

When I asked Harry why he started the Reshoring Awards, he responded, “We started the Awards, initially as a feature of the NTMA/PMA Purchasing Fairs that connected industrial buyers with contract manufacture providers of machined components and tooling. When the Fairs ended, we promoted the awards to the national industry and included AMT, SME and FMA as supporters.” He added, “We wanted to establish a Reshoring Award to “motivate more companies to reevaluate their offshoring and see that it is often more profitable to produce or source domestically.  We hoped that other associations would choose to support similar awards to show that their industries are now successfully reshoring.”

On May 25, 2017, The Reshoring Initiative andPrecision Metalforming Association (PMA)invited companiesthat have “successfully reshored parts or tooling made primarily by metal forming, fabricating or machining to apply forthe First National Reshoring Award. There was one award for buyers and one award for suppliers.” To be eligible for an award, a product or component has to meet the following criteria:

  • Reshoring or foreign direct investment (FDI) of the work occurred between Jan. 1, 2010, and the year prior to the year’s award.  April 30, 2026.
  • Work had to be returned to North America from outside North America.
  • The products, parts, or tooling reshored must be made primarily by forming, casting, fabricating, or machining, including additive machining.

The criteria for winning are:

  • Number of North American jobs created
  • Dollars per year of sales reshored or nearshored from further offshore
  • Capital investment
  • Product innovation
  • Process innovation
  • Success of the project
  • Completeness of application

Bonus points are awarded to PMA, AMT, SME, FMA, and NTMA members. Winners include companies ranging from 20 to 15,000+ employees.

On October 31, 2018, AMT (The Association For Manufacturing Technology) and NTMA (National Tooling and Machining Association) joined the Reshoring Initiative and Precision Metalforming Association (PMA) to invite “Companies that have successfully reshored products, parts or tooling made primarily by metal forming, fabricating, casting or machining, including additive manufacturing,” to apply for the award…the work must have been reshored between January 1, 2013, and December 31, 2018, from outside North America to North America.” 

These four organizations have continued to grant Reshoring Awards every year since 2018.  The winners by year are:

2018 – Mitchell Metal Products, located in Merrill, WI

2019 – Sherrill Manufacturing, located in Sherrill, NY

2020 – Die-Tech & Engineering, located in Walker MI

2020 – Trenton Forging, located in Trenton, MI

2021 – ACME Alliance, located in Tempe. AZ

2022 – Hardinge, located in Elmira, NY

2023 – Hobson & Motzer, located in Durham, CT

2024 – Sumitomo Drive Tech., located in Chesapeake, VA

2025 – Marlin Steel, located in Baltimore, MD

2025 – GE Appliances, located in Louisville, KY

The 2026 Award will be presented at IMTS 2026 to be held September 14-19, 2026 at McCormick Place, Chicago, IL.  The event will take place on the Main Stage between the North and South Halls, probably at 9am on Sept 17th. Applications are due by May 31, 2026. The application form is located at  https://www.amtonline.org/article/reshoring-award.  You may email Harry Moser at <harry.moser@reshorenow.org> for a file for applying.

While each of the above recipient companies may have had a variety of different reasons for reshoring using the Total Cost of Ownership Estimator®, the reality is that companies will only bring back the majority of offshored work if the economics of producing in the U.S. justifies doing so.

In last year’s Reshoring Report cited above, The Reshoring Initiative issued a call for smarter industrial policy that included the following to increase reshoring:

  • Massive investment in skilled workforce development (modeled after German apprenticeships).
  • A 20% lower USD to improve global cost competitiveness.
  • Retention of immediate expensing of capital investments.

I agree with these recommendations and have expressed in previous articles that the actions needed to achieve more reshoring are the same as needed for rebuilding manufacturing in general. These include developing a national manufacturing strategy that encompasses corporate tax reform, regulatory reform, Border Adjustable Taxes (aka VATs), and a Market Access Charge while addressing the predatory mercantilist practices of other countries with regard to currency manipulation, product dumping, and government subsidies.

President Trump has addressed tax reform and regulatory reform, but the other recommendations still need to be addressed.  While we can take advantage of tariffs being a key motivator for reshoring now, we need to have other beneficial policies in place for the future to have long-term growth of our domestic manufacturing base.

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Why it is Critical to Reshore IT Services

Monday, March 9th, 2026

The Reshoring movement is gaining momentum as recent surveys show that a majority of U.S. manufacturers have either reshored or are actively evaluating reshoring portions of their production.  President Trump’s tariffs are only one factor in the increase of reshoring.  According to The Reshoring Initiative, the most common incentives for reshoring include shorter lead times, higher product quality and consistency, lower inventory levels, better responsiveness to changing customer demands, minimal intellectual property theft risk, and improved innovation and product differentiation.:

Data from the Reshoring Initiative shows “As of November 2025, we have recorded over 7600 cases of manufacturing companies that have brought work back to the U.S and from 2010 through November 2025. 2.3 million jobs returned from offshore vis reshoring and FDI.” This article will discuss why reshoring IT services is also critical to the success of American manufacturers and the protection of our national security.

The idea for this topic was presented to me by David Vickery, President of IT GuidePoint Corporation (or IT GuidePoint) who is a fellow member of the Coalition for a Prosperous America whom I used to see on our monthly member calls.  He has been reading my blog articles regularly and contacted me after reading my previous article about Marlin Steel Wire Products.  We met via Zoom last Wednesday and discussed why it is critical to reshore IT services.

David said, “I founded IT GuidePoint Corporation in May of 2008 after a decade as a principal at a publicly traded consulting firm in the Midwest that focused on $50 to $500 million manufacturing and distribution companies. My company focuses on Enterprise Resource Planning (ERP) software optimization and new software selection for manufacturing and distribution companies mostly in the Midwest states of Illinois, Iowa, and Indiana. Let’s say you have a bad implementation and you need someone to review it and help you go through and say, why isn’t it working for us? The business system that you use on your computer to enter orders, ship things, check inventory, run the lines through the manufacturing plant all connects in some way, shape, or form to your planning or ERP system. I like to use the word business system because most people because most people just can’t get their arms around ERP unless they’re in the industry. I work with a network of specialized consultants, including former CIOs and CFOs, to provide practical solutions for clients facing challenges with their business systems.”

He told me, “I believe that your latest article has the same core principle highlighting the value of full domestic self-sufficiency. At least, that is my view because it is a repeated theme in your articles that America must stop outsourcing critical production and become self-reliant with no more depending on China for steel, baskets, chips, printed circuit boards, etc. I’m trying to take that message into the digital realm discussion: ERP and IT systems are now the “nervous system” of every modern manufacturer. Outsourcing those services to non-US citizens creates the same national security, IP, and supply-chain vulnerabilities that David Greenblatt warns about with physical goods. Defining “Made in the USA services” to require USA-citizen ERP/IT resources is simply completing the self-sufficiency picture you already champion.”

David shared his experience from MBA school in the 1990s, where a professor accurately predicted that outsourcing would eventually affect white-collar jobs, similar to how it had impacted blue-collar manufacturing jobs. He mentioned reading an Economic Policy Institute report that said “By 2010, trade deficits with Mexico had eliminated 682,900 good U.S. jobs, most (60.8 percent) in manufacturing.” 

I mentioned that a 2017 Economic Policy report stated,  “Growth in U.S.–China trade deficit between 2001 and 2015 cost 3.4 million jobs.

He emphasized how the hollowing out of rural manufacturing towns leads to broader economic decline, affecting everything from infrastructure to educational systems when major manufacturing plants leave. He said that he wrote an article called Rural Manufacturing Perspective that talks about the little town that he grew up in where manufacturing and agriculture together kept the town going because it has a ripple effect. He said, “When a major manufacturing plant goes away, it can destroy a town. When you hollow out Main Street, you hollow out the churches, you hollow out the infrastructure, the educational system, the police, and the fire department.”

I told him that I understood what he was saying as I wrote blog articles about small towns in North and South Carolina that were nearly destroyed by losing their furniture and textile industries. Everything gets hollowed out because you don’t have tax payers and the local businesses don’t have customers. Both of us agreed that the loss of these jobs in rural America is particularly crushing because there’s no other options for these people.

David mentioned that Deloitte’s 2026 manufacturing industry outlook predicted companies are going to invest another 20% in domestic computer systems. David said, “I’m trying to take that message into the digital realm discussion: ERP and IT systems are now the “nervous system” of every modern manufacturer. Outsourcing those services to non-US citizens creates the same national security, IP, and supply-chain vulnerabilities that David Greenblatt of Marlin Steel warned about with physical goods. There is a security risk when you outsource your ERP and IT systems, which are basically the brains of your business, Intellectual Property, trade secrets, and all that kind of stuff. You have to be really, really careful about who gets access to that information and from what country

He added, “Defining ‘Made in the USA services’ to require USA-citizen ERP/IT resources is simply completing the self-sufficiency picture you already champion. Modern Manufacturing firms like Marlin Steel depend on a sophisticated software implementation behind the scenes for things such as inventory, scheduling, finance, pricing, customer service, quality control, supply-chain management, robotics integration, etc. If that ERP/IT layer is outsourced to be delivered and supported by foreign providers or non-citizen contractors, the entire ‘Made in America’ claim has a hidden security leak.”

I said, “Definitely, because if China has access to your IT systems, they can steal your intellectual property from your CAD systems.  They learn how you price your products, how you schedule production, what your wages are, et cetera. I can’t understand how American manufacturers can’t see that any foreign company that has access to all of your IT systems can get any data they want about you. Very few Chinese companies are privately owned companies. They’re either partially or fully-owned by the government or they have investors that are top-level government employees or CCP members.

David responded, “That’s right, and it’s so dangerous. Not only that, but the configuration of ERP systems takes specialization and knowledge of specific business functions. All of these programs take expertise.  I could name 100 different ERP software programs besides the well-known NetSuite, Infor, Global Shop, and SAP. What we do is we listen to people. The software is made to be infinitely generic because it has to be able to support a very wide swath of companies. So, we have to come back and give them two or three options to configure the software to meet the needs of their company. If you have consultants from another country that don’t speak the English well, they aren’t going to be able to understand what you want and need. They may have a different thought process about quality. My thought process on quality is that it’s not done until it’s 100%, right, and I don’t care how long it takes.”

In closing, David said, “It seems like you have spent decades writing about how to save American manufacturing. I’m asking the ‘Made in the USA’ community to evolve their definition to include ‘Made in the USA’ by U.S. citizens when they select IT & ERP implementation resources for all the positive community and domestic self-sufficiency reasons you outlined.

We agreed that sourcing IT services with American companies will provide a company with the following tangible benefits:

  • In person consulting vs. consulting via Zoom, phone, and email
  • Personal interaction in configuring the ERP software to fit the needs of your company
  • Reduced risk of key company data being stolen
  • Compliance traceability
  • Domestic accountability

We need to do whatever it takes to rebuild our manufacturing industry to ensure that we have the commercial and military/defense products needed to keep Americans healthy and safe.  Reshoring of IT services is another way we can ensure that we have a secure domestic supply chain.

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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. 

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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.

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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.

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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.

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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. 

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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.

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