U.S. lawmakers and officials are crafting proposals to push American companies to move operations or key suppliers out of China that include tax breaks, new rules, and carefully structured subsidies.
Interviews with a dozen current and former government officials, industry executives and members of Congress show widespread discussions underway - including the idea of a "reshoring fund" originally stocked with $25 billion - to encourage U.S. companies to drastically revamp their relationship with China.
President Donald Trump has long pledged to bring manufacturing back from overseas, but the recent spread of the coronavirus and related concerns about U.S. medical and food supply chains dependency on China are "turbocharging" new enthusiasm for the idea in the White House.
On Thursday, Trump signed an executive order that gave a U.S. overseas investment agency new powers to help manufacturers in the United States. The goal, Trump said, is to "produce everything America needs for ourselves and then export to the world, and that includes medicines."
But the Trump administration itself remains divided over how best to proceed, and the issue is unlikely to be addressed in the next fiscal stimulus to offset the coronavirus downturn. Congress has begun work on another fiscal stimulus package but it remains unclear when it might pass.
The push takes on special resonance in an election year. While anti-China, pro-American job proposals could play well with voters, giving taxpayer money or tax breaks to companies that moved supply chains to China at a time when small business is flailing may not.
BIPARTISAN APPEAL
Both Republicans and Democrats are crafting bills to decrease U.S. reliance on China-made products, which accounted for some 18% of overall imports in 2019.
"The whole subject of supply chains and integrity of supply chains... does have a greater place in members' minds," Representative Mac Thornberry, the top Republican on the House of Representatives Armed Services Committee, told reporters May 7.
The medical supply chain and defense-related goods are top of the list.
"Coronavirus has been a painful wakeup call that we are too reliant on nations like China for critical medical supplies," said U.S. Senator Lindsey Graham in a press release on Friday. He is expected to issue a new bill this week.
Republican Senator Josh Hawley is pushing for local content rules for medical supply chains, and "generous investment subsidies" to encourage increased domestic production of a range of goods and components. Republican Senator Marco Rubio introduced a bill May 10 that would bar sale of some sensitive goods to China, and raise taxes on U.S. companies' income from China.
A bipartisan bill introduced by Democratic Representative Anna Eschoo and Republican Representative Susan Brooks would commission a panel to recommend ways to cut drug supply reliance on China.
Republican Representative Mark Green's "SOS Act" proposes funding takeovers of vulnerable U.S. companies that are critical to our national security.
Lawmakers also hope to include reshoring provisions in the National Defense Authorization Act, or NDAA, a $740 billion bill setting policy for the Pentagon that Congress passes every year.
PAY TO STAY
A controversial idea being floated in Washington would allocate as much as $25 billion to companies that make essential goods to move production home, ensuring that even products far down the supply chain were sourced domestically, according to two administration officials.
No lawmaker has publicly embraced it, but several congressional aides acknowledged it is part of the broader discussion in Congress. One of the administration officials said states could administer the funds through their separate economic development organizations.
That would be a boon for states that are struggling to pay their own bills after widespread lockdowns, plummeting tax revenues, and a huge surge in COVID-related costs, one state official said.
But given longstanding concerns about the government setting "industrial policy", the notion of subsidizing industry directly is polarizing, even among Trump's top advisers.
Outright subsidies are a non-starter, said one of the two administrative sources. "Internally some are questioning why we should be providing funds to companies that have left in recent years."
White House economic adviser Larry Kudlow has talked publicly about using tax incentives instead to prod U.S. companies to move some manufacturing home.
White House trade adviser Peter Navarro wants the federal government to buy more U.S.-made medical goods and drugs, but Trump has not signed an executive order Navarro is promoting.
Treasury Secretary Steven Mnuchin and others favor building trusted networks of drug and medical suppliers, said two officials familiar with the discussions.
Giving federal dollars directly to companies to shift supply chains away from China would likely run afoul of World Trade Organization rules, and could discourage foreign companies from doing business in the United States, critics of the idea say.
The State Department, meanwhile, is working with other agencies and foreign governments to diversify American supply chains from China. "This includes returning manufacturing to the United States and expanding our base of international manufacturing partners," said a spokesperson.
Reuters
Mon May 18 2020
U.S. President Donald Trump looks at an assembly line during a tour of Honeywell's facility manufacturing protective face masks for the COVID-19 outbreak in Phoenix, Arizona, May 5, 2020 - REUTERS/Tom Brenner
Pegawai, anggota bomba di lima negeri ada masalah kesihatan
Ujian Kemahiran Taktikal Kebombaan diduduki seramai 12,608 anggota dan pegawai dan hanya 9,313 sahaja yang lulus.
Kerajaan komited lahirkan lebih ramai teknousahawan
Anugerah Teknousahawan TVET@KKDW diperkenalkan bagi memberi pengiktirafan serta penghargaan kepada institusi, pengajar, pelajar, graduan dan alumni yang telah menunjukkan kecemerlangan dalam bidang keusahawanan TVET.
Kedah bakal bangunkan LRT di Langkawi
Kedah merancang membina sistem tren Transit Aliran Ringan (LRT) menggunakan teknologi levitasi magnet di Langkawi
Kes pedofilia MRSM Tumpat diklasifikasikan fitnah, tiada bukti kukuh
Kes pedofilia terhadap seorang guru Maktab Rendah Sains Mara di Tumpat diklasifikasikan sebagai fitnah selepas siasatan tidak menemui bukti kukuh berhubung kes itu, kata Ketua Polis Kelantan Datuk Muhamad Zaki Harun.
Kerajaan berusaha tangani inflasi, tingkat kuasa beli rakyat
Menurut Datuk Armizan Mohd Ali, kerajaan tidak berdiam diri dalam menangani masalah inflasi termasuk melalui pelaksanaan pelbagai bentuk intervensi seperti kawalan harga.
Keutamaan negara Asia Barat untuk penuhi hasrat rakyat Palestin
Sekiranya Palestin diberikan negara dan kebebasan, mana-mana pihak tidak perlu lagi campur tangan dan tidak ada lagi konflik di Timur Tengah.
WEF gemakan wawasan, keterbukaan Malaysia dalam tiga hasrat
Mesyuarat Khas Forum Ekonomi Dunia (WEF) menjadi platform untuk Malaysia menggemakan keterbukaan jalinan kerjasama untuk melonjakkan ekonomi negara.
Hari ketiga lawatan Perdana Menteri, Datuk Seri Anwar Ibrahim di Riyadh Arab Saudi membawa wawasan Malaysia memperkasa hubungan bilateral antara negara, selain perbincangan mengenai pelaburan dan usaha memperkasa jalinan kerjasama sedia ada.
Hari ketiga lawatan Perdana Menteri, Datuk Seri Anwar Ibrahim di Riyadh Arab Saudi membawa wawasan Malaysia memperkasa hubungan bilateral antara negara, selain perbincangan mengenai pelaburan dan usaha memperkasa jalinan kerjasama sedia ada.
Berita antarabangsa pilihan sepanjang hari ini
Antara pelbagai berita luar negara yang disiarkan di Astro AWANI, berikut adalah yang paling menjadi tumpuan sepanjang hari ini.
Berita tempatan pilihan sepanjang hari ini
Berikut adalah berita yang paling menjadi tumpuan sepanjang Isnin, 29 April 2024.
WEF gemakan wawasan, keterbukaan Malaysia melalui tiga hasrat
Malaysia mahu perkasa hubungan bilateral antara negara, selain perbincangan mengenai pelaburan dan usaha mengukuhkan jalinan kerjasama sedia ada.
Biden rancang untuk berdebat dengan Trump
Sebelum ini, Biden tidak komited untuk berdebat dengan lawannya, Trump.
Lelaki bertindak bakar diri di luar mahkamah New York
Max Azzarello yang berasal dari St. Augustine, Florida, dilaporkan telah diselamatkan dan berada dalam keadaan kritikal.
7 juri dipilih dalam bicara kes wang sogok yang dihadapi Trump
Tujuh juri dipilih dalam perbicaraan kes wang sogok Donald Trump di New York, perbicaraan jenayah pertama terhadap bekas presiden Amerika Syarikat.
Berita antarabangsa pilihan sepanjang hari ini
Antara pelbagai berita luar negara yang disiarkan di Astro AWANI, berikut adalah yang paling menjadi tumpuan sepanjang hari ini.
Perbicaraan skandal Donald Trump - bintang porno bermula
Donald Trump menjadi bekas Presiden Amerika Syarikat pertama yang menghadapi perbicaraan kes jenayah.
Bicara kes bayaran tutup mulut yang dihadapi Trump bermula dengan pemilihan juri
Donald Trump akan menjadi bekas presiden pertama dalam sejarah Amerika Syarikat (AS) yang dibicarakan atas tuduhan jenayah.
Trump gagal tangguh, perbicaraan tetap berlangsung 15 April ini
Ini merupakan kali pertama bekas Presiden AS dibicarakan melibatkan bayaran menutup mulut kepada seorang bintang filem lucah.
Biden menang pemilihan peringkat awal di Dakota Utara
Dalam pemilihan peringkat awal di Dakota Utara, terdapat 13 perwakilan ditawarkan dan kebanyakan pengundian dilakukan melalui undi pos.
Berita antarabangsa pilihan sepanjang hari ini
Antara pelbagai berita luar negara yang disiarkan di Astro AWANI, berikut adalah yang paling menjadi tumpuan sepanjang hari ini.
Perbicaraan Donald Trump bermula 15 April
Ini merupakan kali pertama bekas Presiden AS dibicarakan melibatkan bayaran menutup mulut kepada seorang bintang filem lucah.