Sponsors
The bill seeks to bolster U.S. supply-chain resilience and strengthen economic ties in the Western Hemisphere by incentivizing companies to nearshore to Latin America and the Caribbean, but it does so by sacrificing federal revenue, risking U.S. job losses and administrative complexity, and creating environmental, rights, and geopolitical tradeoffs.
U.S. supply chains and national security: incentivizing relocation from China to Latin America/Caribbean strengthens regional supply resilience and reduces U.S. dependence on adversary-linked production.
Lower costs for relocation and investment: generous tax expensing, DFC financing authority, reduced borrowing costs, and support for moving, training, and facilities make nearshoring to the region materially cheaper for businesses.
Job and economic gains in Latin America/Caribbean: increased foreign investment, duty-free preferences, and project support are likely to create manufacturing, construction, and ancillary jobs and bolster local infrastructure in beneficiary countries.
U.S. job losses and domestic industry harm: assisting firms to move production offshore and expanding duty-free imports risks layoffs and long-term declines in domestic manufacturing and local investment.
Federal revenue loss and taxpayer costs: immediate expensing, duty-free preferences, and other incentives reduce Treasury receipts and may increase deficits or crowd out other spending priorities.
Administrative complexity and political discretion: new certification rules, monitoring requirements, and discretionary State determinations create compliance costs, uncertainty for firms, and added burdens on agencies.
Based on analysis of 11 sections of legislative text.
Introduced January 16, 2025 by Mark E. Green · Last progress January 16, 2025
Provides tax and financing incentives, trade preferences, and regulatory conditions to encourage U.S. companies to move manufacturing out of the People’s Republic of China and into Latin American and Caribbean countries. It expands bonus depreciation for qualifying relocated manufacturing property, directs the U.S. International Development Finance Corporation (DFC) to finance moving and workforce costs and reduce interest rates for eligible relocations, authorizes temporary duty-free treatment for goods made by assisted firms, and requires trade and nuclear-negotiation initiatives to deepen economic ties in the Western Hemisphere. Requires applicant corporations to commit to moving production and jobs, forbids ownership or control by foreign adversaries, establishes a tariff-equivalent trust fund to offset revenue effects, and adds national-security priorities to DFC policy. Some tax and incentive provisions apply only for assets placed in service before January 1, 2038 and duty-free treatment is limited to a 15-year window for assisted firms.