Why It Matters

Congress will address what the U.S. needs to do to stay competitive in the global economy in its December 3, 2025 hearing hearing. At stake:

For American Workers: A critical skills gap threatens competitiveness. More than 450,000 technology jobs remain unfilled, while 80 percent of future jobs will require STEM skills.

For U.S. Manufacturers: China now controls 35 percent of global manufacturing versus America’s 12 percent. The hearing will address whether tax incentives for R&D, semiconductor supply chain support, and reshoring strategies can reverse this disadvantage.

For Small Businesses: Tariffs average $1,200 per household annually, and 71 percent of small businesses expect negative holiday impacts. The hearing will test whether protectionism or market-based incentives better serve enterprises dependent on global supply chains.

Broader Context

The hearing reflects mounting concerns about America’s global standing. China now accounts for 35 percent of world manufacturing output, while the U.S. ranks below Switzerland, Singapore, and Hong Kong in competitiveness.

Recent tariff implementation has created economic headwinds. Trump’s tariffs amount to $1,600 per household by 2026, while trading partners have responded with countermeasures affecting U.S. exports.

Despite CHIPS Act investments like Micron’s $200 billion commitment, U.S. manufacturers invest just 0.1 percent of revenue into AI.

The Agenda

The House Ways and Means Committee’s Tax Subcommittee hearing will feature witnesses representing labor, business, and economic policy expertise.

Key stakeholders include 3M Co., advocating on R&D credits and workforce development; the Semiconductor Technology Leadership Council, lobbying on manufacturing competitiveness; and the Corn Refiners Association, focused on trade competitiveness.

Committee members bring distinct perspectives. Rep. Ron Estes (R-KS) champions R&D tax policy, while Rep. Brian Fitzpatrick (R-PA) focuses on semiconductor supply chains. Democrats including Rep. Joe Morelle (D-NY) show bipartisan interest in innovation tax policy.

Between The Lines

Committee Chair Jason Smith (R-MO) frames competitiveness through aggressive trade enforcement and has praised Trump’s "Stargate" initiative.

Republicans are advancing multiple approaches: Estes reintroduced legislation for immediate R&D expensing, Rep. Kevin Hern (R-OK) pushes broad tax cuts, and Fitzpatrick co-sponsored the SEMI Investment Act to expand CHIPS credits.

Democrats share some bipartisan focus, with Morelle and Fitzpatrick co-sponsoring innovation legislation. However, Rep. Jimmy Gomez (D-CA) raises concerns about trade policies harming small businesses.

Competitive Landscape

Industry heavyweights are aggressively lobbying on competitiveness issues. The Semiconductor Technology Leadership Council has lobbied extensively on export controls and workforce development. 3M and Ciena Corp. push for R&D tax expensing.

The Transformer Manufacturing Association of America focuses on domestic manufacturing competitiveness, while digital asset firms argue clear regulatory frameworks are essential for U.S. fintech competitiveness.

The Bottom Line

The hearing reflects competing pressures: 69 percent of manufacturers report successful reshoring, yet structural challenges persist. Lawmakers must balance immediate tariff-induced disruptions against long-term innovation needs while addressing the critical skills gap threatening America’s competitive edge.

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