We’ve been reading a lot about our nation’s imposition of tariffs on Chinese goods and the subsequent impacts they are having both domestically and abroad. We are not foreign policy experts or economists but we do actively reach out to U.S.-based manufacturers and engineers. Our goal is always to help U.S. businesses grow and remain competitive. In a market we see as being made more competitive by fear, uncertainty, and doubt, we know one thing that always seems to help is the R&D Tax Credit.
After the tariffs were first announced in Q2 of 2018, about 2.6 million new jobs were added to the U.S. economy, including 204,000 jobs in manufacturing. However, some industries, such as chemicals, paper, and textiles have lost ground in the same time period. From a 30,000 foot view, it appears that the whole ecosystem of trade and the economic impact of the tariffs is complex and each industry will be affected differently. In our experience, it is best to look at each company individually to determine how it is affected by a given scenario and evaluate the facts and circumstances accordingly.
Manufacturing jobs may never get back to the peak our nation saw in 1979. But the best employment incentive the federal government ever put in place happened when the Economic Recovery Tax Act was signed at the end of 1981. That is what gave us the Credit for Increasing Research Activities (the “R&D Tax Credit”). We have been working with manufacturers and technology companies of all types for over 15 years now. If you employ workers in the U.S. and they are doing work to keep your business competitive, we can probably save you some money.