Wanna Trade?

National Association of Manufacturers gives a blunt assessment of tariff situation

Had enough tariff talk yet? We sympathize. Unfortunately, the ongoing trade situation posed by the United States has global implications that keep it relevant and, in the news--including ours.

One of the latest updates came on April 2, when NAM President and CEO Jay Timmons voiced a public warning that “any scenario … is going to add cost[s] to manufacturers.”

Timmons, appearing on CNBC’s “Worldwide Exchange," told show anchor Frank Holland that while the world still doesn’t know what the latest tariffs will include, manufacturers are concerned—and they have good reason to be. Some 56% of imports to the U.S. are inputs for manufacturing, according to NAM data.

America and manufacturing: a love/hate relationship.--NAM photo

“That’s why you’re seeing this type of concern and sentiment among manufacturers,” Timmons said in response to a question about what the figure means for tariffs’ impact on the industry. Trade uncertainty is the top concern of the majority of manufacturers right now, Timmons said, citing the NAM’s most recent Manufacturers’ Outlook Survey. “That is up 40 percentage points over the last six months,” he told Holland. “That’s a huge jump.”

As with all reports on the tariffs, there's a permanent caveat: This is subject to change. In this case, Timmons' concerns may have since been alleviated by the April 9 announcement that nearly all of the tariffs, except those on China, were being put on hold for at least 90 days. Perhaps the Timmons interview or others like it even influenced the decision--he and a group of NAM members met with Congress on April 8.

That being said, the China tariffs remained at a 125% import tax as of press time for this newsletter. That alone looms large for the American manufacturing sector.

While “everybody would like more things made here in this country, because that’s good for the economy, that’s good for jobs,” new tariffs will drive “up the cost of actually making those things here in the United States,” Timmons continued.

According to a summary on the NAM website (which has since been removed): "Manufacturers need certainty, not the nail-biting anxiety that comes from constant changes to the rules."

“The first thing that we need to see is we need to see Congress do its job and get the tax reforms from 2017 renewed so that we have the certainty in the tax code,” said Timmons on air, adding that manufacturers "also require relief from arduous regulatory burdens, which comes to about $50,000 per employee per year for a small manufacturer."

Timmons, in representation of NAM and many American manufacturers nationwide, concluded with a blunt and fairly grave assessment: “If we don’t get the tax reforms renewed, that is an additional cost. If tariffs are imposed, that’s an additional cost. Manufacturers...are waiting to see whether they should invest and hire. That’s not good for the economy.”