Resurfaced Legislation Incentivizes Reshoring
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A newly reintroduced bill aims to incentivize U.S. companies to bring production stateside—using funding from punitive tariffs on China-made goods.
Congressman Mark Green’s (R-Tenn.) Bring American Companies Home Act proposes using Section 301 tariff revenue to provide tax incentives to companies that shift manufacturing from China to U.S. shores. The cost of moving supplies, machinery and inventory would be, in part, offset by the deduction. First introduced in 2020, the legislation would task the U.S. Secretary of the Treasury with establishing the trust fund, furnished with money collected since President Donald Trump’s duties took effect in 2019.
Rep. Green, who serves as Chairman of the House Committee on Homeland Security and is a member of the House Committee on Foreign Affairs, said the bill would promote America’s economic and national security by reducing dependence on goods like personal protective equipment (PPE). “If the pandemic taught us anything, it’s that we cannot rely on China for critical supplies,” he said.
“We also know Communist China cannot be trusted to treat our businesses fairly,” he added. “We can distance ourselves from China economically while also opening doors of opportunity for America’s business owners here at home.”
“This bill is pro-growth and pro-business—just the right kind of legislation to get our economy back on track,” Green said.
“Congressman Green has been very eloquent in talking about PPE production as he raised this issue as one of the reasons that introduced this bill,” National Council of Textile Organizations (NCTO) president and CEO Kim Glas told Sourcing Journal. U.S. companies answered the call from governments and beleaguered hospital organizations during the height of the Covid-19 crisis, and NCTO “would like to see that those companies receive incentives for continuing to invest in these critical operations that will help not just the United States, but also our Western Hemisphere partners.” About 70 percent of textile products made in the U.S. are exported to Central America, Mexico and Canada.
While “the effort is important,” Glas believes the proposed legislation in its current form will have little effect on American textile producers. “This is a good direction, but right now, there wouldn’t be a whole lot of benefits for domestic textile manufacturers who are looking to increase their production capabilities, because we do not have many members with operations in China.” Many U.S. textile producers operate within the Americas alone, making use of free trade agreements and the benefits of proximity. “There’s no reward, for example, for a U.S. company that’s never left domestically, and never had operations in China.”
Glas said the trade group would like to see long-established U.S. companies receive tax incentives and other benefits to increase their capabilities at home. “By doing so you’re adding new capacities, and helping ensure that supply chains are incentivized to even increase production more,” she said. Such provisions could be added to Rep. Green’s bill, “or any other onshoring or even nearshoring bill, to help companies expand their domestic operations.”
The reintroduction of the bill, along with other recently debated federal legislation and efforts by the Biden administration to learn more about U.S. textile producers, points to growing awareness about the importance of reinforcing onshore supply chains. “This is a this is an indicator that there’s a lot of interest in Congress right now in finding ways to bolster domestic manufacturing,” Glas said.
