The 2024 presidential election is less than a month away and manufacturing remains a hot topic as voters get ready to head to the polls. And on the tails of massive post-pandemic supply chain disruptions, inflation, see-sawing demand, and labor woes, U.S. manufacturers are following this election year with great interest in the hopes that the chosen candidate’s policies will serve to bolster business conditions.
While the economic and manufacturing policies of former President Donald Trump and Vice President Kamala Harris share some common themes, there are some key differences that have taken shape over the past several months that manufacturers should be aware of. This article will explore each candidate’s stances on issues most important to manufacturers, such as tariffs, taxes and energy policy.
Boosting U.S. Manufacturing: Differing Approaches
The 2024 presidential election offers two distinct economic visions for U.S. manufacturing. Let's take a look at where each candidate stands.
Strategic Investments & Workforce Development: The Kamala Harris Plan
Encapsulated in the 'Build Back Better' plan, the Biden administration has focused on investing in American industry and infrastructure to create jobs and strengthen supply chains. Biden also passed the American Rescue Plan Act, injecting $1.9 trillion into the economy to aid recovery from the COVID-19 pandemic's effects, and passing the landmark CHIPS Act, which seeks to revitalize semiconductor manufacturing in the U.S.
But while Joe Biden’s CHIPS Act initiatives focus on revitalizing the semiconductor industry through targeted investments and subsidies, Harris’ policies aim to take Biden-era policies a step further by boosting a broader range of advanced manufacturing sectors by offering tax credits and reducing regulatory burdens.
In a recent speech in Pennsylvania, Harris outlined a $100 billion plan to boost manufacturing, which includes offering tax credits to encourage investment and create industrial jobs and focuses on supporting advanced manufacturing sectors such as artificial intelligence, clean energy, and semiconductor production.
"From our earliest days, America’s economic strength has been tied to our industrial strength. And the same is true today,” said Harris in the Pennsyvlania speech. "So I will recommit the nation to global leadership in the sectors that will define the next century."
To achieve this goal, the Harris plan includes job and tax credits designed to incentivize companies to create new manufacturing jobs—with a focus on industries that are crucial for national security and economic growth.
Other initiatives include research and development tax credits and small business tax credits aimed at helping small manufacturing businesses and entrepreneurs reduce start-up expenses and cut regulatory obstacles. Tapping into the ongoing labor crunch and skills gap that has plagued manufacturers for years, Harris also emphasized the importance of investing in workforce development programs to equip workers with the necessary skills for modern manufacturing jobs.
Tariffs
Kamala Harris’s tariff policy focuses on maintaining and expanding existing tariffs (which were notably established by her rival during his presidency) and is placing particular focus on particularly those targeting China. A Kamala Harris presidency would continue using tariffs to address competition and support the U.S. energy transition. This includes maintaining the current Section 301 tariffs on approximately $360 billion worth of Chinese goods and increasing tariffs on an additional $18 billion worth of steel, aluminum, green energy, and medical goods.
Tax Policy
Not surprisingly, the ambitious “opportunity economy” pursued by Kamala Harris will involve significant tax increases on businesses. This involves raising the corporate tax rate from 21% to 28%, increasing the alternative minimum tax for corporations to 21%, and quadrupling the tax on stock buybacks from 1% to 4%.
Energy Policy
The Biden Administration has taken steps to restore many of the environmental rules removed by Trump, but perhaps the most impactful regulatory move during his Presidency was the EPA’s new rule to lower the threshold for fine particle pollution. Taking this a step further, Kamala Harris' energy policy centers around the green transition, with a strong emphasis on reducing dependence on fossil fuels and promoting clean energy industries. In line with the Biden administration's ambitious climate goals, Harris aims to bolster manufacturing in the renewable energy sector.
Key components of Harris' energy policy include tax incentives for companies investing in green technologies, regulatory support to accelerate the transition to renewable energy, and workforce training programs tailored to the needs of the clean energy sector. This aligns with her broader focus on advanced manufacturing.
Tax Incentives & Trade Barriers: The Donald Trump Plan
While the Harris plan to revitalize manufacturing involves strategic federal investments funded by higher business taxes, the Trump manufacturing plan involves strategic tax cuts and an aggressive trade stance.
Flash back to 2016, and we all remember the “America First” economic policies that were a cornerstone of the Donald Trump's presidency. With a view to revitalize manufacturing through tax cuts, deregulation, and renegotiating trade deals, the Trump Administration took an aggressive approach to bolstering the sector.
Fast forward to now and former President Donald Trump is doubling down on former tax and trade policies. In a recent op-ed for Newsweek Trump outlines his plan to revitalize American manufacturing by offering companies the lowest taxes, energy costs, and regulatory burdens if they produce in the U.S. and hire American workers.
“The United States will give you the lowest taxes, the lowest energy costs, the lowest regulatory burdens, and free access to the best and biggest market on the plane,” said Trump. “but only if you make your products here in America and hire American workers for the job.”
The current Trump plan emphasizes a specific 15% Made in America Corporate Tax Rate and higher tariffs. The new plan also highlights the goal of making the U.S. the most attractive place for manufacturing by offering the lowest taxes, energy costs, and regulatory burdens.
Other key policy proposals include expanding research and development (R&D) tax credits for U.S. manufacturers and creating a new role of “manufacturing ambassador” to advocate for U.S. manufacturing interests and coordinate efforts to strengthen the sector.
Tax Policy
Trump’s Tax Cuts and Jobs Act of 2017 was a significant move, reducing the corporate tax rate from 35% to 21%, which proponents argued would free up capital for investment and expansion in the manufacturing sector.
Going forward, Donald Trump’s tax strategy involves keeping the 21% corporate tax rate established in his 2017 tax reform (currently set to expire in 2025), maintaining the individual income tax cuts, and estate tax cuts and possibly reducing the corporate tax further to 20%.
In addition, Donald Trump’s corporate tax plan would sweeten the deal for companies that make their products in the U.S., with a 15% Made in America Corporate Tax Rate for companies that manufacture their products in the U.S. This is aimed at incentivizing domestic production and job creation.
Trade Policy
Protectionist trade policy was a famous hallmark of the Trump Administration. The former president imposed tariffs on $200 billion worth of imported Chinese goods (roughly 50% of goods), to encourage domestic production. This set off a round of trade wars with China, and drew mixed reviews from domestic producers, with some industrial subsectors benefiting, and others losing out.
In current policy proposals, Trump plans to double down on tariffs—particularly from China. The former president has proposed several specific tariffs aimed at protecting American industries and reducing reliance on foreign imports. These include a 60% tariff on Chinese goods, a 10-20% tariff on all other imports, and a potential 200% tariff on vehicles imported from Mexico.
Energy Policy
Donald Trump's energy policy focuses on traditional energy sources, such as coal, oil, and natural gas, with an emphasis on achieving energy dominance through increased domestic production. Trump has championed deregulation as a way to boost fossil fuel industries, arguing that energy independence is crucial to national security and economic competitiveness.
Trump's approach involves rolling back regulations and making the U.S. a leading global energy exporter, particularly through increased oil and gas production. Under Trump’s leadership, the energy sector would see fewer environmental regulations, lower energy costs, and greater access to public lands for drilling and mining. His policy is aimed at reducing the regulatory burden on U.S. manufacturers, particularly in energy-intensive industries, and keeping energy costs low to make U.S. products more competitive globally.
Summing Up: Key Economic Policy Comparisons
As the 2024 election approaches, the economic policies of Kamala Harris and Donald Trump present U.S. manufacturers with two divergent paths. Let's recap:
Donald Trump’s policies pushes for a return to aggressive tax cuts and a reduction in regulatory burdens. His plan highlights a 15% corporate tax rate for companies manufacturing in the U.S., aiming to incentivize domestic production. Trump's protectionist trade policy would continue, with even higher tariffs on Chinese goods and an expanded role for the U.S. as an energy powerhouse by prioritizing traditional energy sources like coal and oil, maintaining low energy costs for manufacturers.
Kamala Harris emphasizes strategic investments in advanced manufacturing, particularly in clean energy, AI, and semiconductors, backed by tax credits and workforce development programs. Her approach seeks to drive growth in new sectors, with a focus on national security and environmental sustainability. Harris’ proposals come with higher corporate taxes and continued reliance on tariffs to protect U.S. industries, especially from Chinese competition.
This is part of an ongoing series on public policy issues and their impact on manufacturers. Stay tuned for the latest breaking news and manufacturing insights.
