U.S. Senators Joni Ernst (R-IA), Kelly Loeffler (R-GA), and Ted Cruz (R-TX) are introducing the Bring Entrepreneurial Advancements to Consumers Here In North America (BEAT CHINA) Act to incentivize pharmaceutical and medical device and supply manufacturers to relocate to the United States.
“The COVID-19 pandemic has been what I call a ‘great awakening’ when it comes to the vulnerabilities in our supply chain. It’s clear now, maybe more than ever, that our nation has become all too dependent on the Communist Party of China for items like PPE, prescription drugs, and other essential medical supplies. We need to fix that,” said Senator Ernst. “While China is our trade partner, there’s no doubt we can find ways to produce and manufacture goods and supplies right here in the US, and this bill is good step toward that end.”
“For too long, our manufacturing has moved overseas, taking American jobs, jeopardizing our supply chains and forcing us to depend on competitors,” said Senator Loeffler. “The COVID-19 pandemic has shown us just how dangerous it is to rely on other countries, including China, for critical, life-saving products like drugs, medical devices and supplies like gowns, masks and swabs. It is time we incentivize companies to bring those factories, and jobs, back to the United States.”
“Mouthpieces of the Chinese Communist Party have threatened to cut off U.S. access to life-saving pharmaceutical products,” said Senator Cruz. “Because so much of our medical supply and manufacturing has been outsourced to China, this is a credible threat that if they were to follow through on, would be not just economic warfare but real warfare, endangering American lives. I’ve called for structural, and bold initiatives to address our dependencies on China, and am proud to join my colleagues on this important measure to bring medical manufacturing and development back to our shores.”
Bill text is available here.
Background:
- This bill would amend the tax code to provide incentives to companies to relocate the manufacturing of pharmaceuticals, medical devices and supplies to the United States.
- Medical supply and pharmaceutical companies that move from a foreign country to the U.S. can have non-residential real property purchases considered to be 20-year property instead of 39 years, a change which will allow companies to be eligible for “bonus depreciation” and the purchase of the property to be fully deducted in the first year.
- Qualifying companies will also be able to exclude from gross income any gain earned on the disposition of assets in the country the company is moving from. This will prevent companies from taking unnecessary hits from taxes if they choose to move to the U.S.
- In order for companies to qualify for these tax incentives and to ensure the domestic production of materials, companies must adhere to at least the same production levels in the U.S. as levels of the country they move from.
