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It’s Time for Action on Tax, Trade, and Regulatory Reform, Manufacturers Say

Posted By Jeff Moad, June 27, 2017 at 10:19 AM, in Category: Manufacturing Advocacy

American-Manufacturing-Industry-e1446065999693.jpgHUNTINGTON BEACH, CA--Manufacturing leaders are encouraged by the Trump Administration’s early willingness to prioritize, protect, and support the industrial sector but, they emphasize, the industry needs positive, legislative action on tax and trade policies and regulatory reform, as well as support for workforce development and high-level policy representation in the new administration.

Those were among the opinions expressed during a pair of sessions involving manufacturers, industry advocates, and legislative leaders at the recently-concluded Manufacturing Leadership Summit. Summit attendees heard from Congressman Timothy J. Ryan (D-OHIO) in a recorded interview with Manufacturing Leadership Council Co-Founder David R. Brousell. The Ryan interview was followed by a panel discussion, hosted by Brousell, that included David Mongrue, vice president of operations at The Dow Chemical Company; Richard Sade, vice president and chief operating officer at S&S Hinge Company; Todd Boppell, chief operating officer of the National Association of Manufacturers, and Allison Grealis, president of Women in Manufacturing.

Panel members agreed that the Trump Administration’s focus on manufacturing as a key lever of economic growth has helped to attract positive attention to the industry from educators, lawmakers, and even potential workers.

“The message is getting out that manufacturing is a positive thing,” said Sade, a Chicago-based manufacturer and a member of the Manufacturing Leadership Council. Sade said the increased focus has drawn lawmakers to “come to us asking the right questions.”

Boppell agreed. “We are incredibly encouraged,” he said. “The level at which administration and cabinet-level people want to talk about and to manufacturers represents a difference between this administration and the previous one that is night and day.”

But, said manufacturers, positive attention must now lead to concrete policy and legislative action. And not all speakers said they were confident that the positive focus on manufacturing from the Administration will translate into effective action.

“The rhetoric about opening coal mines and old steel mills lacks vision of where we really need to go,” said Rep. Ryan. “Manufacturing 4.0 could be the great equalizer.”

Many speakers said concrete action is needed first on tax reform.

“The current level of taxation is now a competitive disadvantage for U.S. manufacturers, and it will have to be addressed to improve global competitiveness,” said Dow’s Mongrue, also a member of the ML Council.

Mongrue said it’s not clear that the 15% corporate tax rate recommended by the Trump Administration is the right level. But, he said, it should be 25% or less. (The current corporate income tax rate is 34% or 35% where taxable income exceeds $335,000.)

Before passing corporate tax reform, however, members of Congress must agree on how the revenue cuts would be paid for, said Ryan.

Boppell, meanwhile, predicted the House of Representatives won’t have a tax reform bill to consider before September.

Speakers also said the Administration and Congress must deliver on trade reform if U.S. manufacturers are to prosper. Boppell said NAM members are encouraged by the Trump Administration’s stated intentions to focus on new bilateral trade agreements with countries such as Japan. But, speakers said, policy-makers also need to make progress on replacing or renegotiating the North America Free Trade Agreement (NAFTA) and coming up with a replacement for the now-abandoned Trans-Pacific Partnership trade deal.

Speakers said, while improving NAFTA, policy-makers must take care not to rashly abandon it. That’s because many U.S. manufacturers that have constructed their global supply chains around the 25-year-old agreement, Ryan noted.

“We need to be methodical,” said Ryan. “If we do it in a flippant way, it could make our problems worse.”

Congress and the Trump Administration also must reform the government regulation process which, too often, creates rules that don’t do much to help the environment but make it difficult for U.S. companies to compete, speakers said. Boppell advocated not just for repeal of regulations but reform of the regulatory process that would emphasize predictability and science-based rules.

Some speakers were also critical of provisions of the 2018 budget proposed by President Trump that, among other things, would reduce funding for the network of advanced manufacturing institutes created by President Obama under the National Network for Manufacturing Innovation umbrella and eliminate funding for the Manufacturing Extension Partnership that helps small and medium-size manufacturers.

Besides preserving funding for those initiatives, speakers said, Congress and the Administration should alter regulations making it easier for manufacturers to grow the workforce through apprenticeships.

A new, high-level position in the government that would advocate for the manufacturing industry could help drive some of the required action, speakers said. Ryan said he has advocated for a national Chief Manufacturing Officer position, and he allowed that creating a cabinet-level position dedicated to building the manufacturing industry is “not a bad idea.”

Whether or not a cabinet-level manufacturing department is in the cards, speakers said, U.S. manufacturing needs a greater government voice.

“We are the only industrial country where manufacturing doesn’t have somebody at the table,” said Sade.

The full interview with Congressman Ryan can be accessed here: https://www.dropbox.com/s/vv8a4b2mzujxqmv/Ryan_Manufacturing.mp4?dl=0

 


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Written by Jeff Moad

Jeff Moad is Research Director and Executive Editor with the Manufacturing Leadership Community. He also directs the Manufacturing Leadership Awards Program. Follow our LinkedIn Groups: Manufacturing Leadership Council and Manufacturing Leadership Summit



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