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Supply chain: ‘We are getting outcompeted right now’ by other countries, NAM CEO says

As Congress debates legislation aimed to ease supply chain distress, American manufacturers are pressing lawmakers to get something passed.

"We are getting outcompeted right now by the rest of the world, especially China," Jay Timmons, CEO of the National Association of Manufacturers (NAM), told Yahoo Finance (video above).

Lawmakers are currently attempting to combine two pieces of legislation to boost U.S. manufacturing and the competition: the Senate's United States Innovation and Competition Act, or USCIA, and the House-passed America COMPETES Act.

The National Association of Manufacturers sent a letter to congressional leadership on Thursday laying out its top ten priorities on the issue. Timmons emphasized that addressing the issue was a matter of urgency and expressed hope that lawmakers would "put aside all partisan differences" to get a bill passed.

Global supply chain pressures ticked up in April for the first time this year: The Global Supply Chain Pressure Index rose to 3.29 in April from 2.8 in March — though it was still off its peak of 4.45 in December. The gauge provides a bird's-eye view of potential disruptions as well as regional indicators for analyzing trade, inflation, and globalization trends across the United States, China, Japan, the Euro-zone, South Korea, Taiwan, and the United Kingdom.

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According to the Federal Reserve Bank of New York, heightened geopolitical tensions could further strain the logistics of moving global goods.

“The supply chain issues are not going to go away tomorrow — there's no way that will happen,” Timmons said, adding that some provisions in this legislation “will help get us through this very difficult period. But again, it's not going to solve it tomorrow."

U.S. President Joe Biden and Lockheed Martin CEO Jim Taiclet speak with Javeline anti-tank missile assembly workers during a tour of a Lockheed Martin weapons factory in Troy, Alabama, U.S. May 3, 2022. REUTERS/Jonathan Ernst
U.S. President Joe Biden and Lockheed Martin CEO Jim Taiclet speak with Javeline anti-tank missile assembly workers during a tour of a Lockheed Martin weapons factory in Troy, Alabama, U.S. May 3, 2022. REUTERS/Jonathan Ernst (Jonathan Ernst / reuters)

U.S. manufacturers' priorities

In the letter, NAM praised the $52 billion in semiconductor manufacturing subsidies included in both bills and supported another $45 billion to create a Manufacturing Security and Resilience Program as proposed in the House bill.

Timmons also said that a component called the Miscellaneous Tariff Bill (MTB), which was originally passed in 2016 but expired in 2020, would "help manufacturers be competitive," he said.

The letter added that since MTB expired, "manufacturers and other businesses have paid more than $500 million in tariffs, or $1.3 million per day, on goods that are not available in the United States, adding inflationary and anti-competitive costs."

Manufacturers also expressed support for the Ocean Shipping Reform Act, which is aimed at increasing efficiency at U.S. ports and preventing the counterfeiting of goods. According to the letter, counterfeiting, particularly from China, affects all U.S. manufacturers "but is especially devastating for small and medium-sized manufacturers fighting to protect their core products."

Workers watch as U.S. President Joe Biden delivers remarks after touring the General Motors 'Factory ZERO' electric vehicle assembly plant in Detroit, Michigan, U.S. November 17, 2021. REUTERS/Jonathan Ernst
Workers watch as U.S. President Joe Biden delivers remarks after touring the General Motors 'Factory ZERO' electric vehicle assembly plant in Detroit, Michigan, U.S. November 17, 2021. REUTERS/Jonathan Ernst (Jonathan Ernst / reuters)

Labor competition

NAM has also been vocal in the provisions it opposes.

According to Timmons, there are things included in the America COMPETES Act that "need to go away," such as the "card check," which is the initial option for forming a union, not merely an option granted when the employer has illegally interfered in the election process.

The letter argued that "implementing ill-considered labor and card check provisions would upend decades of labor precedent with an anti-competitive, anti-democratic process that abolishes the secret ballot and eliminates appropriate oversight."

And while the supply chain is the main focus, Timmons also noted that U.S. manufacturers are also battling another kind of competition that stems from a tight labor market.

"Before the pandemic, we had a half a million jobs open in manufacturing," Timmons said. "Today, we have 850,000 open jobs."

He added that the industry is "now competing with every other sector that has a workforce shortage. And so we're the sector that actually makes the things that need to get on grocery shelves and to also supply other goods that people want to buy."

Dani Romero is a reporter for Yahoo Finance. Follow her on Twitter: @daniromerotv

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