The Trump administration, through US Treasury Secretary Scott Bessent, is looking into reports of ongoing Chinese participation in American manufacturing projects that receive federal tax benefits. This move indicates a heightened examination of Beijing’s role in sectors deemed crucial by Washington. During a House committee hearing, Bessent revealed this review in response to concerns raised by lawmakers about some US manufacturing tax credit beneficiaries still relying on Chinese personnel and expertise, despite efforts to reduce dependence on China.
Congressman Darin LaHood, a member of the House Select Committee on China, highlighted that certain manufacturers operating in the US continue to utilize Chinese engineers and personnel associated with the Chinese Communist Party. He expressed worries that such arrangements could hinder the intended transfer of technological knowledge and operational control to American firms. In reply, Bessent assured that the Treasury Department is actively monitoring the situation, stating that they are verifying compliance with the regulations and investigating any reported instances.
The discussion primarily focused on the 45X manufacturing tax credit, which aims to promote domestic production and bolster US supply chains in sectors critical for national and economic security. Lawmakers have been advocating for safeguards to prevent federal incentives from indirectly benefiting Chinese entities. Bessent emphasized the thoroughness of oversight efforts, mentioning the administration’s broader actions to restrict Chinese technology in sensitive sectors. He cited examples such as the FCC’s prohibition of Chinese drones and routers and the requirement for electronic systems in US vehicles to avoid connections with Chinese entities.
There is a growing apprehension in Washington regarding the potential for Chinese companies and personnel to maintain influence over vital technologies despite setting up manufacturing facilities in the US. Both Republicans and Democrats are increasingly supporting measures to lessen reliance on Chinese supply chains, particularly in advanced manufacturing, clean energy, telecommunications, and critical technologies.
