Lawmakers press for tariff clarity and carve-outs as small manufacturers warn of unpredictability
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Summary
Members questioned witnesses about whether tariffs should exempt capital equipment and specialized inputs, with witnesses largely supporting narrow carve-outs and stable, long-term trade rules to encourage factory investments.
Members of the House Small Business Committee focused sustained questioning on tariffs’ effect on both inputs and the specialized capital equipment that manufacturers import.
Rep. Greg McGarvey (KY) asked whether companies that want to invest hundreds of millions in U.S. factories should be forced to pay steep tariffs on German presses or Japanese robotic lines. “Do you have to wait until we start making those things in the U.S. before you make your investment, or are you just expected to pay an exorbitant tax on importing these machines?” he asked.
Harry Moser and Charles Crane urged policy clarity. Moser said tariffs “should not apply to capital equipment such as such as you described,” arguing firms need to import specialized machines to build or expand U.S. production. Crane said manufacturers want tariffs to be a “tool” but stressed the industry also needs predictable trade and regulatory frameworks so companies can make long-term investments.
Small manufacturers testified that tariffs on inputs and tooling have created practical problems. Shirley Modlin said her firm relies on imported alloys and carbide tooling, citing an instance where carbide tooling faced tariff rates that rendered procurement “almost unattainable.” Kurt Voss described mixed effects: in some supplier relationships overseas manufacturers absorbed tariff costs; in others the tariffs raised costs and caused business strain.
Several lawmakers proposed legislative options. Rep. Simon and others discussed targeted exemptions and a bill introduced by Rep. (name referenced in hearing) to exempt small businesses from baseline tariffs and to refund past small-business tariff payments. Witnesses warned about loopholes (suppliers reclassifying imports) and urged careful drafting to avoid undermining broader tariff strategy.
No formal action was taken; committee members asked for follow-up materials and suggested staff-level work on tariff carve-outs for capital equipment and on how tariff revenue might be deployed to support domestic projects.
Ending: The committee adjourned without a vote; members may submit additional material to the record within five legislative days.