Sponsors
Introduced January 16, 2025 by Mark E. Green · Last progress January 16, 2025
The bill shifts and incentivizes supply chains and investment toward Latin America and the Caribbean—boosting export opportunities, regional jobs, and U.S. supply-chain resilience—while increasing federal fiscal exposure, creating administrative and distributional winners and losers among U.S. firms, and introducing diplomatic, rights, and security trade-offs.
Millions of American workers and small businesses could gain new jobs and export opportunities as U.S. firms relocate production and expand sales in Latin America and the Caribbean.
U.S. supply chains would become more resilient and less dependent on the People’s Republic of China, reducing disruption risk and improving availability of goods for consumers and manufacturers.
Qualified firms can lower relocation and operating costs through tax expensing, preferential export treatment, and lower-cost DFC financing, making nearshoring financially easier for many U.S.-linked businesses.
The package reduces near-term federal revenue (via expanded expensing) and increases fiscal risk if DFC loans or subsidies are not repaid, potentially raising deficits or crowding out other priorities.
Incentivizing production abroad—even in allied hemispheric countries—risks displacing some U.S. jobs and could raise consumer or business costs during transition periods.
Many program benefits will favor larger or U.S.-owned firms that can meet documentation, negotiate agreements, or absorb compliance costs, disadvantaging smaller domestic firms and some competing U.S. producers.
Based on analysis of 11 sections of legislative text.
Uses tax expensing, DFC financing, 15‑year trade preferences, and conditional trade/nuclear authorities to incentivize relocating manufacturing from China to Latin America/Caribbean.
Provides tax and finance incentives, trade benefits, and policy conditions to encourage U.S. and other qualified companies to move manufacturing out of the People’s Republic of China and into countries in Latin America and the Caribbean. Key tools include an expanded bonus expensing rule for relocated manufacturing property through 2037, a required DFC financing allocation and interest-rate reductions for moving costs and workforce development, a 15-year duty-free/preferential trade treatment for qualifying producers, and new trade and cooperation authorities (including free-trade negotiations and possible nuclear cooperation) tied to country and corporate commitments. The package sets eligibility rules (including production parity, non‑ownership by foreign adversaries, and enforceable relocation commitments), creates a Treasury trust fund to offset revenue effects, tightens DFC rules on foreign-government ownership, and conditions benefits on agency certifications and ongoing compliance. It aims to shift supply chains to the Western Hemisphere while protecting U.S. national-security and employment interests.