The president and CEO of the National Association of Manufacturers warned that massive tariffs could hurt the industry through higher input prices.
In a Tuesday interview with the Washington Examiner, NAM President and CEO Jay Timmons spoke about President Donald Trump’s recent threats of 25% tariffs on Mexico and Canada, as well as the potential for sweeping tariffs across the globe as Trump promised on the campaign trail.
“For any manufactured product that relies on inputs from outside of the borders of United States, it’s going to drive up the cost of manufactured goods, and that is something that I think we have to recognize and we have to understand,” Timmons said.
“And manufacturers, unfortunately, will end up passing those costs on to consumers,” he added.
Timmons said that his group believes that investment and job creation in the manufacturing sector can be increased if overall costs are lowered.
While Timmons expressed apprehension about the new administration’s plans for tariffs, he endorsed its push to extend the 2017 Tax Cuts and Jobs Act, also known as the Trump tax cuts. Trump’s signature cuts helped manufacturing in the United States, he said, and are a key legislative priority.
“If the Tax Cuts and Jobs Act is not renewed, there’s about 6 million jobs that are going to be lost in the economy,” Timmons warned.
The 25% tariffs on Mexico and Canada were supposed to go into effect this week, but after discussions with the leaders of both countries, their implementation was temporarily paused because the countries agreed to add more resources to securing their borders with the U.S. Trump did, though, follow through on placing an additional 10% tariff on Chinese imports.
Timmons said that the smallest manufacturers would be the ones hit the hardest if tariffs on Mexico and Canada are imposed.
“And they’re pretty concerned, because they don’t have a lot of access to capital, they’re kind of operating on the margin, so any increase in cost, it’d really be problematic for them,” he said.
The NAM has been working to communicate those concerns to the Trump administration, he said. Timmons noted that the NAM worked pretty closely with the Trump landing teams during the transition.
“Obviously, everybody’s getting their sea legs and getting confirmed right now, but we are continuing to provide that input,” he said.
Trump has also spoken about imposing 10% to 20% across-the-board tariffs. Many economists argue that tariffs drive up prices and thus slow growth, while proponents say they are a way to shore up U.S. manufacturing and safeguard supply chains.
Timmons said that Trump should be strategic if he does continue to expand his tariff agenda.
“I’m not going to sit here and say that we like tariffs. That would not be accurate,” Timmons said. Still, he said, if Trump does continue to impose tariffs, those levies should be “strategic and targeted to deal with specific issues that cause an imbalance in our trading relationships.”
Timmons said that, while of course his group would like everything to be sourced and built in the U.S., sometimes that can’t happen. For instance, manufacturers use critical minerals that the U.S. doesn’t mine domestically. Even if a company decided to mine those minerals in the U.S., it takes years to get permitting to do so.
“From our standpoint, again, we believe that we can increase investment and job creation here in the United States if we’re lowering costs overall,” he said. “I’d like to build everything in the United States. Sometimes that can’t happen.”
Trump has also pushed for Congress to pass the Reciprocal Trade Act, which allows the president unilaterally to impose tariffs of equal size of any tariffs placed by other countries on the U.S. Of note, freshman Rep. Riley Moore (R-WV) has already introduced legislation to that end.
Timmons said 95% of potential customers live outside of the U.S. and that manufacturers want to also sell their goods to them.
“If you’re adding costs and then you’re layering additional costs, that’s probably not particularly helpful, and if reciprocal tariffs drive down demand for American products, that’s a problem for manufacturers as well,” he said.
Timmons said that the U.S.–Mexico–Canada Agreement, which was negotiated under Trump and replaced the North American Free Trade Agreement, was “highly successful” in driving investment to North America.
Overall, Timmons said, manufacturing employment has been fairly stable, with about 13 million to 14 million workers in the industry right now. There are some 500,000 job openings in the industry that can’t be filled because there aren’t enough people with the relevant skill sets.
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“Our studies show that we’re going to need about 2.1 million jobs, or there will be 2.1 million jobs that we can’t fill by the year 2033,” he said.
Timmons said the types of manufacturing jobs have evolved and aren’t what one might picture from years past. Rather, the jobs are technology-driven, with artificial intelligence increasingly coming into play for the sector.