Episode #11: One Big Beautiful Bill, Tariffs, and Reshaping the U.S. Manufacturing Landscape
In this episode of U.S. Manufacturing Today, host Matt Horine discusses the major headlines reshaping American industry. Highlights include President Trump's introduction of a 50% tariff on all goods imported from the EU, along with a 25% tariff threat to Apple for overseas-manufactured products. Additionally, a significant bill has been passed, dubbed the 'One Big, Beautiful Bill', by the House of Representatives, which proposes various tax incentives and regulations to support domestic manufacturing. The episode examines President Trump's policy shift and its potential to spark a new era for US manufacturing, with emphasis on growth, innovation, and global competitiveness.
Links
- One, Big Beautiful Bill
- Navigating Trump 2.0
- Revitalizing U.S. Manufacturing
- Sign Up on the Veryable Platform
- Jim Vinoski on U.S. Manufacturing Today
- Rosemary Coates on U.S. Manufacturing Today
Timestamps
- 00:00 Introduction and Welcome
- 00:22 Major Headlines in U.S. Manufacturing
- 00:39 New Tariffs on the European Union
- 01:35 The One Big Beautiful Bill
- 02:02 Key Provisions of The Bill
- 03:19 Broader Economic Impact
- 05:22 Future Implications and Senate Deliberations
- 06:44 Conclusion and Wrap Up
Episode Transcript
Matt Horine: [00:00:00] Welcome back to U.S. Manufacturing today, where we seek to provide regular updates on the state of the industry, the changing landscape policies and more.
If you haven't had the chance, please feel free to go check out a few of our episodes. Most recently, Jim Vinoski of Manufacturing Talks Web Show and podcast, along with Rosemary Coates of the Reshoring Institute for deeper dives on reindustrialization causes, changes, and the future.
For today's episode, we are diving into major headlines, reshaping the landscape of American Industry.
First up, the president drops a new round of tariffs on the European Union. Then we'll dive into the passage of the one big beautiful bill that could usher in a new era for US manufacturing. Let's get into it.
President Trump announced a sweeping 50% tariff on all goods imported from the EU. These tariffs go into effect on June 1st and aim to correct what the administration describes as decades of unfair trade imbalances.This is certainly in line with the good faith negotiations guardrails that were enacted with the tariff pause, but the administration does not see movement with the [00:01:00] EU. While there are ongoing negotiations with India, China, and other countries, but that's not all.
In a parallel statement, the president issued a warning to Apple begin manufacturing in the US or face a 25% tariff on all overseas made products.This isn't just about Apple. They're being made an example of, it's a wake up call to the entire tech sector and manufacturing sector. That American soil is once again the preferred ground for innovation and assembly for US manufacturers, especially those competing with European imports. This is a long awaited policy shift and it's not happening in isolation.
Now let's talk about the other big headline. On Thursday, the House of Representatives passed what President Trump calls the one big, beautiful bill. After a week of intense debate and last minute revisions, the bill moves to the Senate for the next phase of deliberation. Jay Timmons president and CEO of the National Association of Manufacturers called this a major victory for manufacturers across America. He didn't mince words. He said, this is a manufacturer's bill, and we agree. Let's break down [00:02:00] why if passed in its current form. Here's what the legislation delivers for the manufacturing sector:
Passed through deduction is boosted and made permanent for small and mid-sized manufacturers. This means more capital on hand to invest higher and expand.
Competitive individual tax rates are locked in. 96% of US manufacturers are organized as pass throughs and pay individual rates. These permanent rates mean stability and predictability.
Estate tax exemption has been increased and made permanent family owned shops can now preserve assets and transition businesses across generations without the crushing estate tax burden.
Immediate RD expensing Reinstated. This is a big one. This slashes the cost of innovation and ensures the US remains a leader in cutting edge manufacturing. Full expensing for equipment purchases need to upgrade a line or invest in automation. This bill lets you write it off immediately. Fueling faster modernization.
Pro-growth interest deduction standards are restored. Financing a new facility or expansion just became more feasible. New facility investment [00:03:00] incentives, whether you're building from the ground up or retrofitting the bill encourages domestic construction and plant growth and the corporate tax rate.
Something that's incredibly important for businesses looking to reshore operations has been locked in at 21%. The global race to the bottom on tax is over. America's rate remains one of the best for doing businesses and creating jobs.
What's the broader economic impact on this bill? Beyond industry specific wins, the bill extends the 2017 Trump tax cuts and adds some powerful middle class perks.
There are no federal tax on tips over time, or American made car loan interest, which is significant for the middle class and America's workforce. That's a projected increase of about $13,000 in take home pay for a typical family and $11,000 in wage growth for the average American worker. According to the Council of Economic Advisors, this bill doesn't just lift businesses, it lifts families, and for manufacturing companies that depend on consumer demand.That's excellent news.
The National Association of Manufacturers, Jay Timmons, put it best. This bill allows manufacturers to [00:04:00] create jobs, invest in their communities, expand domestically, and remain competitive globally. If there are other additional ways that the bill will help impact not only manufacturers but small businesses across the country.
Beyond the increased pass through deductions and the permanent individual tax rate reductions, there is an enhanced r & d expensing component along with support for domestic manufacturing in many other ways, specifically the domestic content bonus credit, the production tax credit or the PTC projects that projects that meet domestic content requirements can receive a 10% bonus on the base credit amount under IRC, section 45 and the investment tax credit.
Eligible projects can receive up to a 10 percentage point increase in the credit rate for domestic content requirements. Steel and iron is a big one. All structural steel and iron used in the project must be a hundred percent produced in the United States.
In the past, under the By America Act and other pieces of legislation that has varied, it is now at a hundred percent.
For manufactured products, a specified percentage of the total cost of manufactured products [00:05:00] must be mined, produced, or manufactured in the us. And this is a step level change over the next couple of years with gives manufacturers time to adjust their supply chains.
The percentage increases over time start at 40% for projects beginning construction before 2025. 45% in 2025, 50% in 2026, and 55% in 2027 and beyond. What does this mean for the future? Let's be clear. This isn't just a tax bill, it's a growth engine for us manufacturing.
Some additional compromise in the Senate may include taxes on remittances or money sent home abroad, and it could come out in the compromise.The House version currently stands at 5%. It's currently at 0%. Without this bill and the Senate may be looking for something a little bit different. By the way, the remittance tax is a critical component of potential immigration enforcement as almost $100 billion are sent abroad from the United States every year tax free.
With lower taxes on investment, clear rules for growth and direct support for domestic production, we're entering a new era of American industrial strength. [00:06:00] More factories, more equipment on the shop floor. More workers employed right here at home, and when you layer this bill on top of today's tariffs on the eu, the policy shift is undeniable.DC is all in. And America is all in on rebuilding its industrial base. The bill now moving to the Senate, and while some debate is expected, momentum is strong and business leaders across the country are urging Quick passage to wrap it up.
This week marks a turning point in that it's the first major piece of legislation in Trump 2.0 and seeks to make permanent and codify the changes rather than through executive orders or continuing resolutions.
With bold legislation advancing and strategic trade actions unfolding, US manufacturing is no longer playing defense. We're on offense, investing, innovating and reclaiming our place as a global industrial powerhouse. That's it for today's episode of US Manufacturing Today. Proudly brought to you by Veryable.
If you're a manufacturer looking too tap into flexible labor to match your production needs, visit www.veryableops.com to see how we're powering the next generation of American industry. And to stay ahead of the curve and to help plan your strategy, please check out our [00:26:00] website at www.veryableops.com and under the resources section titled Trump 2.0, where you can see the framework around upcoming policies and how it will impact you and your business. If you're on socials, give us a follow on LinkedIn, X, formerly Twitter, and Instagram. And if you're enjoying the podcast, please feel free to follow the show on Apple Podcasts, Spotify, or YouTube, and leave us a rating and don't forget to subscribe. Thank you again for joining us and learning more about how you can make your way.