Manufacturing in North Dakota: Part 2 - Today
GNDC understands the importance of manufacturing to the state's economy. The primary sector industry accounts for 6.71% of the Gross State Product. Much of the nation has experienced a manufacturing recession over the past 20 years; however, North Dakota has seen growth and expansion within the industry due to strong market growth and automation opportunities. To celebrate manufacturing week, GNDC will further examine the industry in a three-part mini-series: yesterday, today, and tomorrow.
Current Policy Issues Affecting Manufacturing – Trade and Tariffs
North Dakota has an attractive business climate for the manufacturing industry with low corporate income tax rates, up-to-date infrastructure and smart incentives that drive investment from manufacturers. The legislature made investments in the automation tax credit and in workforce recruitment and retention programs that even further improved this climate. At the state level, policies are in-line but are currently overshadowed by national and international political pressures.
The current trade and tariff environment are becoming a major factor limiting manufacturers. Likely the most significant trade issue that needs to be resolved for North Dakota is the United States-Mexico-Canada Trade Agreement (USMCA). One out of four manufactures export to Canada and Mexico with 70% of those being small to medium-sized manufacturers. Top exports to these two markets include petroleum and coal products, agriculture, construction and mining machinery, food and beverages, electrical equipment and components, motor vehicle including bodies, trailers, and parts, rubber products, and other machinery.
Without tariff-free trade across North America secured by a strong trade agreement, North Dakota’s manufactured goods exports to Canada and Mexico could face a minimum of $47 million to $191 million in extra taxes (compared to zero tariffs today). - Nation Association of Manufacturers
Congressional passage of the USMCA will help North Dakota manufacturers grow in the United States, compete globally and support millions of well-paying manufacturing jobs across the country.
For more state by state specifics on businesses being harmed by the ongoing trade war, click on the link here.
Photo credit to Reuters.