The manufacturing sector shows signs of expansion as the US government begins divvying up $39 billion in Chips Act grants to the semiconductor industry to construct domestic plants. Taiwan Semiconductor Manufacturing Co. (TSM) will receive $11.6 billion to build new chip factories in Arizona. National Association of Manufacturers (NAM) CEO Jay Timmons joins Market Domination Overtime to discuss what this means for the American manufacturing sector.
Timmons calls the government investments "good news for America": everything manufactured today has a component requiring the use of a semiconductor chip, he explains. The concerning news, Timmons says, is what’s ahead: "Now we have to see some action to provide for the ability of manufacturers to plan for the future," the NAM CEO states.
US government agencies have imposed a regulatory burden on manufacturers "that simply cannot be followed," Timmons says. He adds that today’s manufacturers are left trying to determine where to direct their capital, in the US or abroad. The NAM CEO believes that US tax policy does not support manufacturing growth, pointing to China’s 200% research and development tax deductions versus America’s 0%.
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