Tariffs on copper and other basic ingredients for goods produced in the U.S. may prove to be an obstacle for domestic manufacturing growth.
Since taking office for his second term, President Donald Trump has enacted, reduced and re-enacted significant tariffs on goods imported into the U.S., creating uncertainty among U.S. manufacturing leaders and businesses on both pricing and sourcing of goods and materials. Trump said this week that the U.S. will levy a 50% tariff on copper by Aug. 1.
The growing concern about tariffs is that U.S. manufacturing companies rely on importing raw materials, specialized equipment and machinery, chemicals and energy resources to produce goods -- from HVAC systems to vehicles -- domestically, said Charles Crain, managing vice president of policy at the National Association of Manufacturers. The U.S. can produce only about 67% of the inputs needed for domestically manufactured goods, he said.
"The fact remains that manufacturing exists within a global supply chain," Crain said during a panel hosted by the Brookings Institution on Thursday. "We really need to solve for that 30% of outstanding inputs we need to make things here."
Tariff concerns grow as tax fears ease
The frequently changing tariffs are confusing to navigate and appear contradictory to the administration's intention of elevating U.S. manufacturing, said John Hazen White Jr., executive chairman of the Taco Family of Cos., an HVAC, plumbing and mining product manufacturer. White spoke on the panel with Crain.
"Imposing these tariffs on us for products we literally can't buy here is a little bit awkward," he said.
A large portion of raw materials are imported from countries such as China and Mexico, White said. China, especially, has faced drastic changes on tariffs from the Trump administration.
My pricing is all over the place, it's become a bit of an administrative nightmare for companies like us.
John Hazen White Jr.Executive chairman, Taco Family of Cos.
"I can guarantee there are pumps shipping out of my factory today that are being followed by pumps with different tariffs," White said. "My pricing is all over the place. It's become a bit of an administrative nightmare for companies like us."
White said he hopes the administration will slow down on imposing tariffs, noting that U.S. manufacturing companies "cannot turn a light switch on and be producing domestically next week."
"My single biggest thought would be to settle and coordinate what tariffs he's implementing and how they're implemented," he said. "There's a dot not being connected there."
Though tariffs continue to create uncertainty and unpredictability for U.S. manufacturing companies, Crain marked the passage of Trump's 'One Big, Beautiful Bill' as a win.
The bill extends the 2017 Tax Cuts and Jobs Act, which Crain said prompted "record capital investments in the manufacturing industry." The Trump bill prevents tax increases and provides incentives to U.S. manufacturing companies for capital equipment purchases, R&D, job-creating projects and factories.
"It really should have the potential to have pro-growth impacts for manufacturers," he said.
Indeed, White said the uncertainty caused by waiting on the bill's passage likely led to companies postponing manufacturing investments. He said he expects to see a potential investment surge now that the bill's tax cuts and incentives have become law.
Makenzie Holland is a senior news writer covering big tech and federal regulation. Prior to joining Informa TechTarget, she was a general assignment reporter for the Wilmington StarNews and a crime and education reporter at the Wabash Plain Dealer.
