EXCLUSIVE: The House Select Committee on the Strategic Competition Between the U.S. and the Chinese Communist Party is set to hold its first hearing on Tuesday, and the manufacturing sector is hoping lawmakers on the bipartisan panel will advance policies to make American manufacturers more competitive with their rivals in China.
Aric Newhouse, the senior vice president for policy and government relations at the National Association of Manufacturers (NAM), sent a letter to the House lawmakers who will serve on the select committee urging them to work with the trade group to "develop concrete policy solutions for the U.S. to strengthen our security, bolster our economy and protect American innovation."
"Our approach to China must navigate a complicated set of U.S.-China ties: China is a fierce economic competitor that frequently fails to play by the rules and a major challenger to American global influence," Newhouse explained. "Simultaneously, China is a necessary partner on global issues such as climate change and a critical market for manufactured goods. We must ensure that manufacturers in the U.S. can compete with China around the world, including in China itself."
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Newhouse suggested a number of areas in which the select committee could help American manufacturers, including by reforming federal permitting to promote more domestic investment in energy and manufacturing to prevent it from being stymied by years-long delays.
"Speeding up the permitting process and establishing permit certainty will support industrial growth," Newhouse wrote. "Efforts to expand domestic energy production, upgrade our nation’s infrastructure, increase critical mineral extraction and processing and expand facilities are all dependent upon the success of advancing permitting reform."
NAM also called for Congress to reform tax policies to make American manufacturing more competitive. Specifically, the letter called for the research and development (R&D) expense tax deduction to be reinstated so that manufacturers can deduct those expenses immediately, rather than amortize them over a period of years.
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The trade group also urged the reversal of a recent change that blocks small and medium-sized manufacturers from including amortization and depreciation in their deductions of interest on business loans, in addition to restoring full tax expensing for capital equipment and machinery.
It also emphasized the importance of a healthy and robust workforce in the manufacturing sector, noting that the number of open jobs in the sector has doubled since before the pandemic and is expected to rise to roughly 4 million by 2030.
Increasing employer participation in postsecondary education and training programs, updating the immigration system to support the need for workers while securing the border, and reforming healthcare in a manner that avoids a "costly Medicare for All" scheme were all cited by Newhouse as policy areas that would support the manufacturing workforce.
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Newhouse’s letter to the select committee on behalf of the NAM also urged lawmakers to help support export markets for goods manufactured in America by working with allies in the Indo-Pacific region to deepen relationships with trading partners through new trade agreements and other steps to expand market access.
"Our exports and local sales in China directly contribute to the ability of manufacturers to compete, to invest and to hire here at home," Newhouse wrote. "Notably, more than half of American manufacturing workers depend on exports for their paychecks, and China is the fourth-largest market for U.S. manufactured goods exports ($103.8 billion in 2022), behind only Canada, Mexico and the European Union."
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Newhouse’s letter also noted the need to ensure that critical U.S. technologies don’t undermine America’s security interests through investments in Chinese firms participating in the "increasing practice of civil-military fusion in China," and said policies to prevent that from happening "must be carefully crafted and targeted, and where possible, coordinated with our allies and partners to ensure their effectiveness."
The NAM also called on Congress to protect manufacturers’ intellectual property from counterfeit goods made in China, prevent the use of forced labor in global supply chains, and continue efforts to enhance infrastructure to bolster the competitiveness of the U.S. economy.
