Chemical Tax Repeal Bill Aims to Boost American Manufacturing Competitiveness
Representatives Dan Newhouse (R-WA) and Terri Sewell (D-AL) have reintroduced the American Chemical Manufacturing Act, a bipartisan bill seeking to repeal the Superfund chemical excise tax reinstated under the Infrastructure Investment and Jobs Act.
The tax, which went into effect in July 2022, applies to 42 chemicals and 151 imported substances. According to industry analysis, this tax imposes approximately $14.4 billion in additional costs on American manufacturers over a decade, affecting sectors beyond just chemical production.
Impact on American Industries
The Superfund tax affects numerous manufacturing sectors, including:
- Chemical production
- Agriculture
- Consumer goods
- Construction
- Energy
- Healthcare
The tax creates significant cost increases throughout supply chains. Manufacturing companies report price increases between 5-9% on chemical inputs, which ultimately leads to higher costs for consumers on everyday products.
Bipartisan Support
Rep. Newhouse stated: “The Superfund Tax is a direct hit to American manufacturers and consumers alike. Our legislation would eliminate this burdensome tax and allow our chemical producers to compete on the global stage while keeping costs down for consumers.”
Rep. Sewell added: “We need to support Alabama’s chemical manufacturing jobs and keep our industries competitive. This bipartisan legislation will help American producers compete globally while protecting consumers from unnecessary price increases.”
Industry Backing
The legislation has received support from multiple industry organizations, including:
- American Chemistry Council
- National Association of Chemical Distributors
- American Petroleum Institute
- American Cleaning Institute
- National Association of Manufacturers
Chris Jahn, President and CEO of the American Chemistry Council, noted: “The chemical industry supports more than 25% of U.S. GDP and 4.5 million American jobs. This tax puts these jobs at risk while making everyday products more expensive for consumers.”
Economic Context
The chemical manufacturing sector contributes significantly to the U.S. economy:
- $517 billion to U.S. GDP
- 529,000 direct jobs
- 4.5 million related jobs across other sectors
- $182 billion in annual exports
Supporters argue that repealing the tax would strengthen domestic production capabilities and reduce reliance on foreign chemical imports, particularly from countries with less stringent environmental standards.
What’s Next
The bill has been referred to the House Ways and Means Committee for consideration. While previous attempts to repeal the tax have not advanced, the bipartisan nature of this legislation suggests growing recognition of its economic impact.
Manufacturing groups continue to advocate for the bill, highlighting how the tax impacts regional economies and raises prices throughout supply chains during an already challenging economic period.