Democrats Slam Tariffs; Manufacturing Witnesses Offer Mixed Views

Ranking member Lydia Velasquez noted that more than 90,000 manufacturing jobs have been lost in the last year.

National Association of Manufacturers Managing Vice President of Policy Charles Crain did ask for changes to tariff policy in his written testimony, but focused more on the workforce and his appreciation for tax cuts in the One Big Beautiful Bill when asked questions at the Nov. 20 hearing.

He acknowledged that trade uncertainty was the top concern among NAM members for the last three quarters.

In his submission, he wrote, "Even when running at full capacity -- every shift filled, every factory floor humming -- manufacturers in the U.S. must still import about 16% of the inputs we rely on to produce goods here at home. In other words, America can supply 84% of its manufacturing inputs domestically -- but we need a runway to reach 100%."

Therefore, NAM suggested that manufacturers be able to import those inputs duty-free for a time.

"Manufacturers plan years ahead -- sometimes four or five years, sometimes much longer for major projects like mining and processing critical minerals. We need predictability and a competitive edge to sustain that investment," he wrote.

Similarly, Harry Moser, founder of the nonprofit Reshoring Initiative, wrote that manufacturers should be allowed to get a break on tariffs on inputs as long as the "importer commits to building capacity here and submits an aggressive plan to do so. As long as the factory stays on schedule, tariffs are deferred or reduced."

He also wrote that Section 232 tariffs on steel and aluminum are making machine shops uncompetitive, because imported metal products are less than the raw material cost for their shops. He also said a tariff on machine tools and robots, as contemplated under a launched Section 232 investigation, would put American manufacturing further behind China.

He argued that devaluing the dollar by 20% would be the best policy, imposing a value-added tax would be second best, and tariffs would be his third choice.

Moser wrote, "If chosen, simplify and stabilize with one rate for everything, from everywhere, forever. Except higher on China."

However, he also said that many of the announcements for new factories are dependent on the tariffs being in place, since typically U.S. production is 10% to 20% more costly than in other developed countries, and is 50% more costly than in China.

Moser said the trade deficit has been stable at 4% of GDP for 15 years, but that the dividends that foreign investors get from buying assets in the U.S. compounded over that time.

Democratic witness Shirley Modlin, the owner of 3D Design and Manufacturing in Powhatan, Virginia, was the most negative on tariffs. In her prepared statement, she wrote, "We’ve been in business since 2005 and we’ve never experienced such turmoil. This is largely due to the crushing tariffs that impact every area of our industry. Our products are made in America but a lot of the aluminum, steel and alloys we use in our manufacturing are imported from Canada and Mexico.

"I never know if there will be no tariff, a 25% tariff, a 50% tariff or an even higher tariff on aluminum. This makes it extremely difficult to set prices, which hurts our business."

In response to questions, Modlin said that she can't increase prices after a contract is signed, but the metal costs change.

"One of the most expensive tariffs I have is carbide," she said, used for tooling. It has a 90% tariff, she said. That makes it almost impossible to pay for new tooling.

"Small manufacturers don't have big margins, we don't have a lot of cushion," she said, and the unpredictability of tariffs is making her question how long her business can last.

AmeriLux CEO Kurt Voss disagreed. Voss, whose Wisconsin business is both a distributor and manufacturer, complained about the fact that tariffs are applied to capital equipment, but said that otherwise, tariffs are creating business opportunities among his customers, who are now more cost-competitive since the competing imports are now more expensive. "We're gaining business as a result of the tariffs," he said. His imported inputs are barely more expensive, he said, as the exporter has eaten most of the cost.

Voss said that importing equipment to make polycarbonate sheet from Ireland added $150,000 to the project.

"Tariffs on equipment needed to reshore manufacturing to the United States obviously doesn’t make sense and should be corrected," he wrote.

Rep. Morgan McGarvey, D-Ky., said his Louisville-centered district is a manufacturing powerhouse, with GE Appliances, a Ford plant and more. He said, "Tariffs are neither good nor bad, tariffs are a tool." He said a hammer is a tool, but doesn't work for all uses -- it's good for building your house, and not so good for fixing your iPhone.

He asked Moser if tariffs should apply to Japanese industrial robots, German stamping presses or Italian CNC machines.

Moser replied, "We feel very strongly the tariffs should not apply to capital equipment."

Rep. Tony Wied, R-Wis., also bragged about manufacturing in his district, saying almost a quarter of the workers in his district are in manufacturing. He asked Voss to elaborate on his earlier comment that his foreign suppliers were eating the tariffs.

Voss said since the tariffs began, fewer components he's using are imported. But for those he does import, if they had passed along the full tariff, they would have become more expensive than other suppliers.

After several Democrats talked about the complaints they're hearing about tariff chaos from their constituents, Voss said they are exaggerating the negative effects of the changes.

"There's some comments today like the sky is falling because of this tariff policy, and I'm here to say the opposite," he said, even if there are specifics, like the capital equipment, that could be improved.