Things Move Fast in Washington DC for Manufacturing

In the first fourteen days of his return to office, President Trump imposed an additional 10 percent tariff on imports from China, announced and then delayed 25 percent tariffs on Canada and Mexico, began reinstating the Section 232 tariffs on steel and aluminum imports, and launched an investigation into at what rate he should impose reciprocal tariffs on each country. With 1,438 days left in his second term, President Trump is just getting started.

This year marks my twenty-fifth as a lobbyist in Washington, D.C., and this second Trump administration is already moving much more quickly than in the first to make its mark on manufacturing in America. With only a few days left prior to my presentation at the annual Non-Ferrous Founders’ Society Industry Executive Conference in New Orleans on Saturday, February 22, 2025 at 8:30am, I fully expect even more activity from the Oval Office.

Donald Trump’s Washington moves quickly, skip a day and you may miss a week. The day President Trump released his steel and aluminum tariff proclamations, February 10^th, I was on Capitol Hill, meeting with lawmakers. A senior official that day warned of more actions ahead on imports, another relayed a story of tariffs being among the President’s four favorite things, and to a person, each anticipated additional rounds of restrictions on imports.

The additional 10 percent tariff applied to all imports from China effective February 4, 2025, combines with the existing Section 301 tariff rate of 25 percent on over 6,800 imports to create a new baseline 35 percent rate on most industrial imports. This new 10 percent action leaves virtually no shipments from China immune from Washington’s tariffs.

Ignoring politicians and governments, foreign or domestic, is no longer a viable option. As China continues its assault on U.S. manufacturing, establishing a foothold in Mexico, staying aware of the latest developments from Washington, D.C. is essential.

Manufacturers should seek opportunities and plan for the challenges raised by suppliers, customers, and government actions. Shortly after the steel and aluminum tariff announcements, many clients began sharing notices from customers stating that they will not accept cost increases due to tariffs. Others saw the steel producers publicly raise their prices. This is precisely why manufacturers must develop strategies early to prevent being trapped between their much larger customers and being beholden to their material suppliers.

In the February 22^nd Executive Conference session, we will preview what to expect next on raw material tariffs, address the potential trade wars with China, and cover the next round of tariffs anticipated after the April 1 America First Trade Policy review period concludes. Indeed, the Chairman of a key congressional committee recently told me that we may see tariffs related to currency manipulation, trade imbalances with countries, and an expedited review of the U.S. Canada Mexico Agreement.

Tariffs and Washington’s efforts to reorient supply lines is only one aspect to consider as you attend the February 21-23 NFFS Conference in New Orleans. If Congress does not act this year, over $4.6 trillion in tax increases begin to take effect. In my meetings on Capitol Hill, lawmakers are discussing difficult decisions – which tax provisions to make permanent, which temporary, and which should lapse.

Starting in January 2022, manufacturers began paying taxes on their Research and Development activities, forced by Congressional inaction to amortize their R&D activities over five years. Conference attendees can learn more about Research and Development and available credits and incentives at a 4:00pm session on February 22^nd.

Also due to Congressional inaction, in 2023, 100 percent expensing for equipment, known as bonus depreciation began to fall by 20 percent annually to today’s 40 percent expensing rate. And without Congressional action by December 31^st this year, every passthrough business in the country will immediately face a tax increase when their deduction disappears and the top individual tax rate reverts to 39.6 percent.

Building a talent pipeline is top of mind, and as a client recently told me, manufacturers face a crisis in the workforce right now, struggling to recruit the next generation. Conference attendees cannot miss February 22 session at 3:00pm on Strengthening Workforce Development through NFFS as the industry will need to expand its workforce should President Trump’s tariffs and tax cuts lead to increased purchase orders for U.S. manufacturers. Building a pipeline today, ensures a steady flow of workforce talent into the future.

Attending the Executive Conference will provide members with the insights they need to make informed business decisions in light of uncertainty from the nation’s capital. All supply lines go through Washington, D.C. these days and all investments should factor in that tax changes and tariffs are here to stay.

What is the President’s end game? Will he negotiate with Canada and Mexico? Will tariffs take effect March 12^th on steel and aluminum imports from Europe, Japan, South Korea, and other allies? How will renegotiating the U.S., Mexico, Canada Agreement impact cross-border supply lines, especially in the automotive sector?

We look forward to further exploring these questions, and others, at the Non-Ferrous Founders’ Society Industry Executive Conference in New Orleans from February 21-23, 2025. I look forward to seeing you there.

Omar S. Nashashibi is the Founder with Inside the Beltway Solutions, LLC, a non-partisan lobbying, research, and strategic consulting firm representing manufacturing associations and downstream manufacturing businesses.