Sponsors
The bill aggressively incentivizes U.S. firms to nearshore production to Latin America/Caribbean and strengthens regional trade and security ties — trading off increased fiscal cost, potential domestic job displacement and market distortions, and added regulatory, diplomatic, and safety risks.
Manufacturers and small U.S. firms relocating production from China to Latin America/Caribbean receive large tax and financing incentives (immediate 75% deduction, lower interest floors, DFC-backed relocation financing and workforce training), lowering upfront costs and making nearshoring more affordable.
Small businesses, U.S. supply chains, and taxpayers gain stronger supply‑chain resilience and economic security by diversifying sourcing away from the People’s Republic of China toward Western‑aligned partners in Latin America/Caribbean.
Workers and businesses in Latin America/Caribbean (and U.S. exporters) stand to benefit from new job creation, workforce training, investment, tariff‑free access for qualifying exporters, and expanded market access via trade negotiations, which could boost regional employment and U.S. export opportunities.
U.S. taxpayers face fiscal costs and higher federal exposure from accelerated tax deductions, tariff‑revenue losses, increased DFC subsidies/loans, and potential defaults or bailouts tied to supported projects.
American workers and some domestic industries may see limited or no net U.S. job gains — relocations could shift economic activity offshore and impose transition costs on affected U.S. employees and communities.
The bill creates uneven competitive advantages by narrowly targeting incentives (e.g., firms that relocate from China or U.S.-owned firms getting DFC priority), potentially favoring certain companies and disadvantaging others.
Based on analysis of 11 sections of legislative text.
Uses tax, DFC financing, trade preferences, and diplomacy to encourage U.S. firms to relocate manufacturing from China to Latin America/Caribbean and support related costs.
Introduced January 16, 2025 by Mark E. Green · Last progress January 16, 2025
Creates a package of tax, financing, trade, and program changes to push U.S. companies to move manufacturing out of the People’s Republic of China into countries in Latin America and the Caribbean. It gives a temporary tax bonus for qualifying relocated equipment, directs a share of DFC (Development Finance Corporation) funds to pay moving and workforce costs and lower loan interest, and authorizes temporary duty-free or preferential trade treatment for goods made by participating firms. Sets rules and oversight: companies must meet job-creation and ownership tests, move and keep covered assets in the Western Hemisphere within set timeframes, and be certified by federal agencies. The bill funds some of the incentives by routing tariffs on Chinese-made goods into a trust fund and changes DFC policy to prioritize U.S.-owned firms and critical industries; it also requires trade and nuclear-cooperation negotiations with eligible Latin American and Caribbean countries.