Rep. Chip Roy introduces BEAT CHINA Act to combat supply chain crisis


In an effort to combat the supply chain crisis and the rise of China’s economic influence, Rep. Chip Roy is introducing a bill to incentivize companies to bring their manufacturing back to the United States.

The BEAT CHINA Act — introduced on Wednesday — looks to push manufacturers producing goods abroad to move to the US by providing tax advantages to eligible companies. 

Under the legislation, non-residential property purchases made by companies that shift their operations domestically would be “considered 20-year property instead of 39-year property,” which would make them eligible for full and immediate expensing.

The bill would also make full and immediate expensing permanent in addition to allowing manufacturers to “exclude from gross income any gain earned on the disposition of assets in its country of origin,” to prevent them from being hit with a tax upon their relocation. 

An image made with a drone shows shipping containers at the Seagirt Marine Terminal, Port of Baltimore, Maryland, USA, 18 October 2021. While Baltimore's marine terminal is not dealing with the same backups as shipping ports in California, the US is facing a supply chain crunch.
Shipping containers at the Seagirt Marine Terminal, Port of Baltimore on Oct. 18, 2021. While Baltimore’s marine terminal is not dealing with the same backups as shipping ports in California, the US is facing a supply chain crunch.
EPA

Proponents of the measure note that China currently produces 28 percent of the world’s manufacturing output in contrast to the United States’ 16 percent, with GOP lawmakers arguing the supply chain crisis proves the US needs to take action to reduce its dependence on other countries for products.  

“As long as we depend on China and the rest of the world to keep our shelves stocked, our economic prosperity, our political liberty, and our national security are all in grave danger. Relying too heavily on supply chains based in other countries is a recipe for disaster — especially when the governments of those countries wish to destroy our way of life, as does the Chinese Communist Party,” Roy (R-Texas) said in a statement. 

America's supply-chain shortage is evident in local pet and grocery stores in  New York City as store owners struggle to keep inventory stocked on October 16 2021.
America’s supply chain shortage is evident in local pet and grocery stores in New York City as store owners struggle to keep inventory stocked on Oct. 16, 2021.
Mpi999 / MediaPunch

“We must take bold action, consistent with the spirit of free enterprise, to reduce our dependence on foreign supply chains. The American people deserve an economy that can provide for itself; that’s why I am proud to reintroduce the BEAT CHINA Act, which would extend tax advantages to any foreign manufacturer that moves its production to the U.S.”

The bill would require manufacturers to maintain the same production levels as they conducted abroad to qualify for the tax incentives. 

Republicans have been highly critical of the Biden administration’s handling of the supply chain crisis, arguing more should have been done to prevent the bottleneck ahead of the holidays and that it could have national security implications. 

Rep. Roy's bill GOP argues that the US needs to take action to reduce its dependence on other countries for products.
Roy argues that the US needs to take action to reduce its dependence on China for products.
Michael M. Santiago/Getty Images

Lawmakers on both sides of the aisle have also expressed strong concerns about threats from the CCP, emphasizing the need to combat China’s efforts to overtake the US as the largest economy.

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