The bill would allow firms to deduct the entire cost of capital spending associated with moving out of China…
(Natural News) Rep. Mark Green of Tennessee is set to introduce a bill that will help American companies move their manufacturing from China back to the United States. The bill builds on calls for the country to “decouple” from the former as a result of the coronavirus (COVID-19) pandemic.
Talking to the Epoch Times, Green said that his forthcoming bill would allow firms to deduct the entire cost of capital spending associated with moving out of China — a practice called “immediate expensing” — to lure companies to move back home. Green proposed that the government would pay for this using money collected from U.S. tariffs on Chinese imports.
Moving manufacturing back to America
White House economic adviser Larry Kudlow also recently endorsed the idea of covering 100 percent of moving costs. According to Kudlow, it would be “a very good thing for American companies.”
The bill comes as President Donald Trump’s administration pushes to cut America’s supply chain dependence on China. The coronavirus pandemic’s disruption of global supply chains, coupled with Beijing’s mishandling of the outbreak, has led the U.S. and other countries to look for other manufacturing bases. (Related: China’s response to COVID-19 is the latest in string of COVER-UPS and suppression.)
“Any efforts to decouple is … wise for us, both from an economic standpoint and from a national security standpoint,” Green added.
Green stated that his bill was slated to be introduced by the end of the week.
Other countries doing the same
What Green is proposing is similar to what other countries are already doing to shift manufacturing out of China. Japan recently set aside $2.2 billion in its financial aid package to help Japanese manufacturers move out of China.
The extra budget, approved by the government in an attempt to offset the effects of the pandemic, included about $2 billion for companies moving production back to the country, and $221 million for those moving production to other countries.
Securing against Beijing
Prior to this new bill, Green also introduced another bill, called Secure Our Systems Against China’s Tactics (SOS ACT), aimed at stopping China from acquiring American companies vital to national security.
“Right now, they are on a buying spree across the globe for companies with a significant national security implication,” Green explained.
One example that Green cited, was United Airlines’ recent sale and leaseback of 22 planes to BOC Aviation, the Hong Kong-listed aircraft operating leasing unit of the state-owned Bank of China.
The deal gave China 22 large aircraft that, Green said, China could “take off from the market if they wanted to hurt the United States.”
North Atlantic Treaty Organization (NATO) General Secretary Jens Stoltenberg has also warned of such developments.
“Some may seek to use the economic downturn as an opening to invest in our critical industries and infrastructure,” Stoltenberg said.
The SOS ACT is designed to incentivize American investors who fund companies critical to national security by having the Treasury back 50 percent of their investment. This way, even if the investments fail, investors will still be able to recover half of their initial costs. To pay for this, the bill will set aside $10 billion from the Coronavirus Aid, Relief, and Economic Security (CARES) Act that Congress passed to address the economic fallout of the coronavirus pandemic.
Green has also supported canceling U.S. debt obligations to Beijing as a way to recoup the costs of the pandemic’s damage to the country. President Donald Trump, however, rejected the idea, calling it a “rough game.” Instead, the president suggested that any sanctions against China would involve further tariffs.
The Trump administration is also reportedly considering a range of other measures against the regime for its role in the pandemic. These include imposing sanctions and trade restrictions as well as removing the legal protection of sovereign immunity. The latter would allow American’s to sue Beijing in U.S. courts.