Billions of U.S. tax dollars would otherwise have fueled China’s mission to dominate the clean energy economy of the future.
A bipartisan bill introduced Wednesday, led by Sen. Sherrod Brown (D-Ohio), would ban Chinese companies from receiving taxpayer-funded benefits under the Inflation Control Act (IRA). “A bill to use American tax dollars to fund American solar manufacturing” A bipartisan group of lawmakers, including Sens. Bill Cassidy (R-Louisiana), Jon Ossoff (D-Ga.), and Rick Scott (R-Fla.), passed legislation that would block China and other “foreign companies of concern” from receiving the 45 times IRA advanced manufacturing tax credit. The limit is achieved by amending the Internal Revenue Code of 1986.
As readers of our blog know, the IRA was designed to serve two purposes: to spur the growth of American factories and build more resilient supply chains to reduce our reliance on Chinese manufacturers for some of the most important goods in future markets. Indeed, the IRA has already enabled a factory boom.
To date, private companies have invested $177 billion in the U.S. EV and battery supply chain and $81 billion in the U.S. clean energy manufacturing and infrastructure sector. White HouseBut that progress is at risk if Chinese companies are allowed to withhold American taxpayer money intended to expand China’s manufacturing footprint in the United States.
“For too long, China has dominated clean energy supply chains. We have seen American jobs and factories move overseas,” President Joe Biden said. speech The first anniversary of the Inflation Control Act will come in August 2023. “The answer of previous administrations — mostly Republican, but some Democratic — has been, ‘Find the cheapest labor in the world, close a factory here, build a factory somewhere over there, and import the product from overseas.’ That’s gone. We manufacture it here, we ship it over there.”
Solar panels were first invented at historic Bell Labs in New Jersey. Over 70 years agoChina has established an advantage in the global solar panel supply chain. Huge government subsidies It sparked a wave of overcapacity in America’s booming solar panel factories. I couldn’t stand itThe IRA has helped revitalize this vital industry in the United States, but that progress is at risk as cheap solar imports flood the U.S. market. once againEnsuring that a robust IRA tax credit supports the American manufacturers for whom it is intended is essential to achieving the law’s objectives.
With billions of dollars flowing from IRAs into America’s nascent clean energy industry, it’s worth noting that solar power is just one of many sectors with attractive tax credits that China is eyeing.
new South China Morning Post According to the article, Scott Paul, president of the Federation of American Manufacturing, is urging the federal government not to use IRA tax credits to nurture Chinese EV companies in the US while the domestic auto supply chain works through the delicate transition to EV production.
“Scott Paul, president of the American Manufacturing Federation, called it a ‘dumb’ idea, saying it ‘comes at a time when many new and established brands are ramping up EV production, and that Beijing-backed Chinese auto giants could wipe them out,'” the article quoted Paul as saying.
China will use every opportunity to solidify its control over the clean energy supply chain, and we cannot allow our tax dollars to aid Beijing in this. If we do, we will give up our ability to supply our own clean energy products and innovate the energy solutions of the future.
