Episode #17: Trade Policy, 1BBB and Economic Shifts Under Trump 2.0
In this episode of U.S. Manufacturing Today, host Matt Horine discusses critical developments in U.S. trade policy and their impact on American manufacturers during the Trump 2.0 administration. With the July trade deadlines approaching, negotiations with major global partners and record tariff revenues are reshaping the trade landscape. Key highlights include a significant trade pact with Vietnam, the discussed remittance tax affecting the financial ecosystem, and GE's substantial investment in U.S. manufacturing. The show emphasizes the importance of operational flexibility, local sourcing, and a resilient domestic workforce for manufacturers to thrive amid these changes. Listeners are encouraged to stay informed and adapt to maintain competitiveness in the evolving industry.
Links
Timestamps
- 00:00 Introduction to U.S. Manufacturing Today
- 00:19 Current Trade Policy and Economic Signals
- 00:56 Impact of Tariffs and Trade Deficit
- 01:38 China's Manufacturing and Global Trade Shifts
- 02:10 New Trade Pact with Vietnam
- 03:33 Senate's Big Beautiful Bill and Remittance Tax
- 04:41 H-2B Visas and Domestic Workforce Challenges
- 06:04 Reshoring and Domestic Investments
- 06:45 Operational Flexibility and Future Outlook
- 08:19 Conclusion and Resources
Episode Transcript
Matt Horine: Welcome back to U.S. Manufacturing Today. The podcast powered by Veryable where we talk with the leaders, innovators, and change makers, shaping the future of American industry, along with providing regular updates on the state of the industry, the changing landscape policies and more.
Today we're unpacking a pivotal moment in U.S. trade policy, global negotiations, and the signals that US manufacturers can't afford to miss.
We're now in week 24 of the Trump 2.0 administration, and the stakes just keep rising as we inch closer to the critical July trade deadlines.
There's a lot happening beneath the surface. Negotiations with the European Union, Canada, Mexico and other key Asian partners are heating up while manufacturers across the country brace for potential tariff escalations, supply chain shifts and rapid policy turns.
But beyond the negotiation rooms, we're seeing some fascinating and telling economic signals.
Let's start with tariffs. U.S. tariff revenue hit an all time high in May of 2025, around $22.3 billion. That follows $16.5 billion in April, bringing the year to date total to more than 67 billion in new tariff collections.Think about that. The federal government is now pulling in record revenue from tariffs.
This isn't a symbolic policy lever anymore. It's become a substantial funding source. And at the same time, the U.S. trade deficit saw its largest monthly decline on record in April, down by $74.7 billion to a deficit of just $87.6 billion. A substantial decrease. That's a huge swing.
Whether you love tariffs or hate them, the data shows they're actively reshaping trade flows.
And here's another critical piece, China's manufacturing, PMI fell by 2.1. Points in May. That's not just a number. It's a signal that China's manufacturing sector is cooling off, and these trade wars may actually be having an impact on some of our partners.
Even more telling is that container shipping traffic from China has now dropped to its lowest level since February, right after Chinese New Year, which [00:02:00] is the historical time where that tends to drop off. We're seeing a realtime slowdown in the movement of goods out of China, and so the global trade landscape is changing and it's changing fast.
Just announced today, President Trump revealed a new trade pact with Vietnam ahead of the July 9th deadline. The US will drop the previously announced 46% reciprocal tariff, and instead impose a 20% tariff on Vietnamese imports, along with a 40% tariff on goods trans shipped through Vietnam from other countries.
In return, Vietnam agrees to open its market, allowing US exports to enter duty free. That's a huge win. It's been a historical challenge in places like Vietnam to get American products access to the market, and it has alleviated concerns with a lot of US based manufacturers who source material from Vietnam, especially in the furniture industry.
But why it matters, it does clear the uncertainty. This agreement replaces the severe 46% levy that was paused, but set to be reinstated in July, and it cracks [00:03:00] down on transshipment abuses.
The steep 40% tariff aims to deter China. From routing goods through Vietnam to evade US duties, which is becoming a common practice, and it boost US market access.
While imports face higher duties, American exporters gain cost-free entry into Vietnam signaling a strategic move toward reciprocal trade balances. This deal is more than just tariffs. It's a strategic step in the broader effort to rebalance trade with Southeast Asia.
Clamp down on tariff avoidance and reinforce incentives for onshoring and domestic competitiveness.Meanwhile, the Senate just passed its version of the big beautiful Bill, a sweeping trade and revenue package.
One piece is flying under the radar, a proposed tax on remittances, and this is a critical component of the bill right now, remittances, the money Senate brought by people working in the US who are non-citizens, they are not taxed, but the house version of the bill had originally proposed a 5% remittance tax, and the Senate is pushing for 1%. There are growing calls to raise [00:04:00] this rate.
Why does this matter for manufacturers?
First, the revenue. It's a potential new funding stream for the treasury at a time when the federal government is looking for ways to pay for infrastructure defense, and yes, reshoring initiative incentives.
But second, and maybe more importantly, it addresses a quiet but significant offshoring of capital.Every dollar sent abroad is a dollar that isn't circulating in the American economy supporting small businesses. Or driving domestic investment. A remittance tax doesn't stop legal immigration, but it does create a stronger incentive for wages earned here to stay here that fuels main street and it doesn't flow out of the country. And that brings me to another issue that deserves some attention.
The overuse of H2B Visas in manufacturing the H2B Visa program designed for temporary non-agricultural workers, was never intended to become a long-term labor pipeline for industrial employers. Yet in some regions and sectors, that's exactly what's happening.
For instance, I saw something on X this week [00:05:00] about companies posting for welders at $18 an hour. There's a common refrain about there being a labor shortage and shortage of welders and skilled trades, but when you post for work that's at $18 an hour for these types of skilled trades, wages are driven down across the board and instead of investing in local workforce development, skills training, or on-demand labor solutions. Some manufacturers just rely heavily on these temporary visas to fill the roles sometimes out of seasonal work.
And while that might seem like a quick fix for labor shortages, it comes with severe consequences. It depresses wage growth, it limits incentives to modernize operations, and it increases the outflow of earned wages through remittances capital that could otherwise be in reinvested here at home.
If we're serious about reshoring and reindustrialization, we need to be just as serious about building a resilient domestic workforce. One that includes upskilled workers, flexible labor models, and real economic participation for American families. And while all of this [00:06:00] unfolds at the policy level, real dollars are hitting the ground.
GEs $490 million investment into US manufacturing footprint is a prime example. It's not just a capital play. It's a bet on the future of domestic production. Investments like this have a ripple effect, especially for tier two and tier three suppliers, smaller manufacturers, and the broader supply ecosystem. When big players commit to building here, the supply chain must follow. It's a strong signal that reshoring isn't just rhetoric anymore. It's actually happening.
But here's the critical point. None of this guarantees stability. The July deadlines could bring new tariffs. The big beautiful bill could pass with surprise provisions through reconciliation and global shipping patterns could shift again, and the labor market is still tight.
This is where operational flexibility becomes a superpower: on-demand labor, local sourcing, and the ability to quickly ramp production up or down. They aren't just nice to haves anymore. They're survival tools in today's market okay. Manufacturers that can pivot quickly, [00:07:00] control their supply chains and tap into Veryable capacity will be the ones who thrive.
So as we head into July, keep your eye on a few things, trade negotiations in that deadline, and whether those deadlines get extended or enforced in different ways.
The final version of the Big Beautiful Bill, which is set to pass here in the next week or so. But especially some type of reconciliation and future steps on that remittance tax and visa reform, China's shipping and production activity and domestic investment signals like GEs and who follows their lead, which next tier of suppliers follows the lead and a quick tip update on some of our previous issues and episodes.
Just this past week, the Secretary of Transportation announced an enforcement of an executive order for non domiciled CDLs and English speaking. CDL drivers to be enforced on our roadways. It continues to play out. We've seen crashes all over the United States. We previously had Shannon Everett on in a prior episode with American Truckers United - their advocacy has been critical in [00:08:00] getting this passed and enforced.
And last week we talked about investment casting with Merrin Muxlow and a couple of other episodes. So if you haven't had the chance to check those out, please feel free to go to our site and do so.
We're in a moment where Reindustrialization isn't just policy, it's a movement.
But movements favor those that are prepared. Stay agile, stay local, stay informed.
That's it for today's episode of U.S. Manufacturing Today.
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.