A Senate Committee on Small Business and Entrepreneurship hearing held last week had only one manufacturer serving as a witness. He liked the tariffs because they stopped the bloodletting of cheaper imitations from China. However, he told the Senate that changes could be made to existing tariff policy to help lower costs as commodity and other input prices are rising fast.
“We definitely appreciate the tariffs from a standpoint of keeping the knockoffs out of the market, but the tariffs hit us on the equipment that we need to import to expand. Most of that equipment we need is specialized from Germany,” said Bill Zoeller, CEO of Zoeller Pump Company in Louisville, KY [Testimony]. He said he has two more machines coming in from Germany this summer, to increase production of residential and commercial water pumps and effluent systems that his company makes in the U.S. Zoeller did not put a price on what he spent on that equipment, so the tariff value is unknown. But in response to his Senator, Rand Paul (R-KY), who is mostly anti-tariff, Zoeller said that “in order to increase capacity in the U.S., I believe that we’re going to need even more equipment and some of that equipment is imported and we will have to pay the tariff.”
Sen. Paul said “somebody [should be] looking at these tariffs” and questioned whether we need them on industrial equipment needed “to build things here,” he said. For what it’s worth, Congress has consistently complained about tariffs but other than Representatives Greg Steube (R-FL-17) and Jared Golden’s (D-ME-2) ‘Secure Trade Act’ (H.R. 4978), which establishes a 10% baseline tariff and removes China from Permanent Normal Trade Relations (PNTR), there are no bills looking to improve or remedy existing tariff architecture. H.R. 4978 is currently before the House Committee Ways & Means for consideration.
Despite accounting for just 12% of the total economy, 55% of the total American R&D spending is financed by manufacturers. As of 2025, 98% of all manufacturing firms in the United States are small businesses with fewer than 500 employees. These numbers speak to the importance of maintaining an industrial base; it is from that base that innovations take root.
In his opening remarks, Acting Chairman Jon Husted (R-OH) noted that employees in the manufacturing sector earn 13% more than the rest of the private sector. He said manufacturing has “one of the largest multipliers of any industry in the United States,” with every dollar invested in manufacturing leading to $2.69 of growth in the broader economy. And every dollar in manufacturing wages produces some $4.33 in income for the overall economy. He was sourcing from documents provided by witness Edward Hill, Senior Research Associate at The Ohio Manufacturing Institute out of The Ohio State University [Testimony].
Sen. Husted said that from some of the roughly 687,000 manufacturing jobs in Ohio, most of it was driven by smaller businesses rather than the big multinationals in the state.
“Honda, GE Aerospace, Whirlpool, Lincoln Electric, Goodyear, among many others, are the state’s economic anchors,” Hill said in his opening remarks. He noted that “their supply chains are disproportionately composed of smaller manufacturers, including from Ohio. The fabricated metal shops, precision machine firms, plastics and rubber and other goods suppliers help make those anchoring businesses viable. When a large Ohio plant thrives, dozens of smaller suppliers thrive with it. When one closes, the supply chain feels it first,” Hill said.
Senate Small Business Hearing Suggests Some Tariff Wariness
Praised Manufacturing Extension Program
A Senate Committee on Small Business and Entrepreneurship hearing held last week had only one manufacturer serving as a witness. He liked the tariffs because they stopped the bloodletting of cheaper imitations from China. However, he told the Senate that changes could be made to existing tariff policy to help lower costs as commodity and other input prices are rising fast.
“We definitely appreciate the tariffs from a standpoint of keeping the knockoffs out of the market, but the tariffs hit us on the equipment that we need to import to expand. Most of that equipment we need is specialized from Germany,” said Bill Zoeller, CEO of Zoeller Pump Company in Louisville, KY [Testimony]. He said he has two more machines coming in from Germany this summer, to increase production of residential and commercial water pumps and effluent systems that his company makes in the U.S. Zoeller did not put a price on what he spent on that equipment, so the tariff value is unknown. But in response to his Senator, Rand Paul (R-KY), who is mostly anti-tariff, Zoeller said that “in order to increase capacity in the U.S., I believe that we’re going to need even more equipment and some of that equipment is imported and we will have to pay the tariff.”
Sen. Paul said “somebody [should be] looking at these tariffs” and questioned whether we need them on industrial equipment needed “to build things here,” he said. For what it’s worth, Congress has consistently complained about tariffs but other than Representatives Greg Steube (R-FL-17) and Jared Golden’s (D-ME-2) ‘Secure Trade Act’ (H.R. 4978), which establishes a 10% baseline tariff and removes China from Permanent Normal Trade Relations (PNTR), there are no bills looking to improve or remedy existing tariff architecture. H.R. 4978 is currently before the House Committee Ways & Means for consideration.
Despite accounting for just 12% of the total economy, 55% of the total American R&D spending is financed by manufacturers. As of 2025, 98% of all manufacturing firms in the United States are small businesses with fewer than 500 employees. These numbers speak to the importance of maintaining an industrial base; it is from that base that innovations take root.
In his opening remarks, Acting Chairman Jon Husted (R-OH) noted that employees in the manufacturing sector earn 13% more than the rest of the private sector. He said manufacturing has “one of the largest multipliers of any industry in the United States,” with every dollar invested in manufacturing leading to $2.69 of growth in the broader economy. And every dollar in manufacturing wages produces some $4.33 in income for the overall economy. He was sourcing from documents provided by witness Edward Hill, Senior Research Associate at The Ohio Manufacturing Institute out of The Ohio State University [Testimony].
Sen. Husted said that from some of the roughly 687,000 manufacturing jobs in Ohio, most of it was driven by smaller businesses rather than the big multinationals in the state.
“Honda, GE Aerospace, Whirlpool, Lincoln Electric, Goodyear, among many others, are the state’s economic anchors,” Hill said in his opening remarks. He noted that “their supply chains are disproportionately composed of smaller manufacturers, including from Ohio. The fabricated metal shops, precision machine firms, plastics and rubber and other goods suppliers help make those anchoring businesses viable. When a large Ohio plant thrives, dozens of smaller suppliers thrive with it. When one closes, the supply chain feels it first,” Hill said.
What One KY Manufacturer Suggested
Zoeller gave an example of suppliers moving abroad; it’s not always because the large original equipment manufacturers (OEM) forced them there. He said one of his suppliers moved to Mexico in 2012 and, while he remained with that supplier, he could no longer call his product American-made because the item now made in Mexico was a key component – a motor for electronic water pumps.
Zoeller said that he wanted to keep that Made in the USA label so he decided to invest in making the motors themselves.
While Zoeller’s actions are commendable, they are most likely a stand-out example and not the norm. So in thinking of what small manufacturers need, Zoeller put regulatory compliance costs up top.
“Manufacturers spend $350 billion every year on regulatory compliance,” he said. “Congress should also double down on the infrastructure bill, which is set to expire later this year. Manufacturers need robust highways, bridges, ports, and waterways to make and move products across the country. And manufacturers need permitting reform that cuts red tape and clears out roadblocks. Overall, the small business manufacturer needs strategic trade policies to ensure we have easy and reliable access to the inputs and machinery we need to make things here,” he said.
Sen. Joni Ernst (R-IA) used her time during the Q&A period to bring up her ‘Made in America Manufacturing Finance Act’ (now one year old) to raise the Small Business Administration (SBA) loan limit from $5 million to $10 million. But this added debt was not what Zoeller was looking for, and his comment likely rings true for many privately held, family businesses.
Zoeller sidelined the loan increase completely.
“We’re a conservative business. We don’t take out debt. We need to manage our cash flow appropriately,” he said, adding that the extension of the tax cuts and other tax write-offs in the “One, Big, Beautiful Bill” helped. “That law has been a good thing for us. It has allowed us to bring on additional equipment to increase production, and the bonus appreciation is beneficial for us. I’d also say, add to that what we could use is policies that support our industry’s efforts to upskill and train the manufacturing workforce.”
Senate & Witness Support for Manufacturing Extension Partnership
Zoeller did not mention the Manufacturing Extension Partnership (MEP) by name, but others in the hearing did. The MEP helps small manufacturers adopt advanced technologies, adopt state-of-the-art management techniques, qualify for OEM supply chains and compete more effectively in domestic and global markets. Budget proposals have sought to eliminate or reduce the program, though Congress has consistently preserved it.
Ranking Member Edward Markey (D-MA) said Trump was trying to “cancel the program,” though much of his opening remarks and questions were partisan in nature.
CPA Board of Directors, and CPA Advisory Board, members Marc Fasteau and Ian Fletcher wrote about the program in February, saying if the United States was serious about reindustrialization, “strengthening firms inside the tariff wall is just as important as erecting it. Tariffs protect the market; productivity and technological diffusion determine who thrives within it. Strengthening the MEP would reinforce the administration’s commitment to domestic production and small-business manufacturing growth.”
A chunk of the hearing was spent on history lessons. The theme of the hearing was American 250: Industrialization and the Rise of Small Manufacturers.
“The Republic was barely a year old in 1790 when President George Washington in his first annual address to Congress called for establishing an industrial policy as a foundation of national defense,” Hill said in what was many a history lesson peppered into the hearing throughout the day. “President Washington’s first address to Congress in January 1790 contains a sentence that most Americans don’t know. President Washington refers to a free people, writing, ‘Their safety and interest require they should promote such manufactories as tend to render them independent of others for essentials, particularly military supplies.’ President Washington’s first policy proposal to Congress was to build American industry.”
Sen. Husted was fine with the tariffs, overall, but wanted to reconcile tariffs with the rising cost of living.
Hill said there was a solution to the cost factor: increases in productivity means more goods and more goods means lower prices.
“We are also now witnessing the beginning of new advances in digitally integrated operations technologies on the shop floor. The smaller employers with 100 or fewer employees cannot afford the management help to get them to learn and use that equipment and so the hurdle rates become too high for them,” he said. “That’s why the Manufacturing Extension Partnership is so important to me. It’s part of the solution. We have data from 2016 showing that two-thirds of all companies that invested in Industry 4.0 equipment in 2016 lost money. Why? Because the management systems weren’t there and that is where MEP comes in.”
MADE IN AMERICA.
CPA is the leading national, bipartisan organization exclusively representing domestic producers and workers across many industries and sectors of the U.S. economy.
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