NATALIA FALCHI WRITES — Months of energy shortages and power cuts to households in northeastern China have caused outages in factories across the nation. With this, while energy demand is soaring, so is the demand for Chinese exports, all of which affect the supply chain. The situation is expected to worsen in the winter, as temperatures drop and the country experiences a domino effect due to the interdependence of electricity, production, and supply chain arrangements.
Chip Roy, an American attorney and U.S. Representative for the state of Texas, has recently introduced the BEAT BACK CHINA Act. First presented on October 20th, 2021, the act is an effort to strengthen domestic manufacturing and reduce US reliance on global supply chains, particularly with China.
The rise of China’s economic power is another reason that Rep. Chip Roy is hoping to get the Act approved and to incentivize companies to bring back production to the United States. If he succeeds, this act will categorize commercial business properties purchased by companies that return production to the US as “20-year property instead of 39-year property.” Essentially, this would allow companies to be considered for full and immediate financial support in addition to allowing owners to “exclude from gross income any gain earned on the disposition of assets in its country of origin”-thus preventing manufacturers from severe taxation upon relocation.
Those in support of the BEAT CHINA Act have emphasized that China currently produces 28% of the global manufacturing output, whereas the United States produces approximately 16%. That’s why GOP lawmakers have strongly argued that the supply chain crisis must be fixed — and why the US needs to return some of its own businesses home.
The BEAT BACK CHINA Act might energize the supply chain, but who knows whether Rep Chip Roy will be able to energize Congress?