How Your Company Could Benefit from the New Manufacturing Competitiveness Act

More than 200 members of the National Association of Manufacturers (NAM) wrote a letter recently to the House of Representatives in support of the The American Manufacturing Competitiveness Act of 2016, which proponents say will eliminate trade-distorting tariffs on imports that are critical to American manufacturers. NAM members called the relief the bill provides as “long overdue.” The bill was introduced to the House of Representatives on April 13 by House Ways & Means Committee Chairman Kevin Brady (R-TX) and other committee leaders.

NAM reports that companies have paid nearly $2.5 billion in higher taxes on imported materials since the expiration of a previous tax relief program in 2012.

“Congress should eliminate all tariffs on inputs used by U.S. manufacturers to compete in the global economy.”

“Congress should eliminate all tariffs on inputs used by U.S. manufacturers to compete in the global economy,” said Bryan Riley, Jay Van Andel Senior Analyst in Trade Policy at the Center for Trade and Economics, part of the Institute for Economic Freedom and Opportunity at The Heritage Foundation. He feels the problem is that the act will only allow for small temporary tariff cuts of up to $500,000 per year for three years on all imported goods that are not produced in the U.S.

“If small temporary cuts on tariffs applied to inputs are beneficial, surely large, permanent cuts would be even better,” said Riley.

Hun Quach, vice president for international trade for the Retail Industry Leaders Association, said the act would “enhance the competitiveness of American businesses” by cutting production costs in the United States. William E. Allmond, Vice President of Government and Public Relations at the Society of Chemical Manufacturers and Affiliates said in a public statement that the cost savings on tariffs would help “members maintain competitive operations, invest in new facilities, re-train workers, and preserve our manufacturing base.”

While the bill is a good first step, Congress should still “think bigger,” said Daniel J. Ikenson, director of the Cato Institute’s Herbert A. Stiefel Center for Trade Policy Studies. Ikenson said Congress should eradicate all important deterrents to investment in U.S. manufacturing and impediments to its global success by eliminating all duties on intermediate goods. He feels Congress should also revise the antidumping law to forbid the imposition of “remedial” duties when the costs of such action to downstream industries are estimated to exceed the benefits to the petitioning industry.


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