President Obama Calls for Returning Manufacturing Operations to the United States and Increased Investigations of Unfair Trade Practices Abroad

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In his State of the Union address on January 24, 2012, President Obama proposed a multi-faceted strategy to bolster the U.S. manufacturing base and help domestic industries succeed in global competition. He called for new tax incentives for U.S. manufacturing and policies that promote U.S. exports. The President also indicated that his administration would protect U.S. manufacturers through increased investigations of alleged foreign unfair trade practices, among other measures.

In terms of specifics, President Obama first called for tax reforms that encourage U.S. manufacturers either to remain in the country or bring operations back from overseas. His proposal would require multinational firms to pay a minimum corporate tax rate while rewarding companies with U.S. operations with tax deductions. The policy would grant further incentives for high-technology manufacturing and for manufacturers that invest in new plant, equipment, and employee training if the firms relocate to areas that have been blighted by the loss of industrial jobs or the closure of military bases. According to the President, “It is time to stop rewarding businesses that ship jobs overseas, and start rewarding companies that create jobs right here in America.”

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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