Just a few weeks after elections in the United States, two new congressmen have attached their names to legislation that would prevent Chinese companies from accessing credits available in the Inflation Reduction Act.
U.S. Reps. John Moolenaar (R-MI) and Jared Golden (D-ME) introduced bipartisan legislation to block implementation of the Dept. of the Treasury’s final rules on the Sec. 45X advanced manufacturing production credit. The congressmen state that Treasury’s rules on 45X allow Chinese affiliated companies to receive American tax dollars for producing clean energy components. Moolenaar represents Michigan’s Second Congressional District, which is home to the under-construction battery factory from Gotion High Tech, a Chinese company.
“Under no circumstance should the Chinese Communist Party (CCP) be allowed to benefit from the tax dollars of hardworking American families. Unfortunately, the Biden administration’s 45X rule has left the door open for CCP-affiliated companies, like Gotion, to reap billions in taxpayer funding. That’s wrong and the commonsense bipartisan legislation we are introducing today will stop it,” Moolenaar said.
The legislation introduced today would use the Congressional Review Act (CRA), which gives Congress the authority to disapprove regulations from the executive branch.
“America must be a nation of producers, not just consumers,” Golden said. “That’s the goal of domestic manufacturing credits: to support America’s production economy. But the Biden administration has consistently included loopholes in rulemaking that allow foreign-owned companies — including those with ties to adversarial foreign governments — to benefit from preferential tax treatment intended for American firms. The administration needs to go back to the drawing board and ensure they are not subsidizing our global competitors.”
If this legislation is passed by the House of Representatives, the Senate and signed by the President within 60 legislative days of the section 45X rule being released by the executive branch, the rule would be ended.
In 2023, U.S. Congress attempted to use the Congressional Review Act to overturn President Joe Biden’s two-year pause on new solar tariffs. The attempt eventually failed when Biden vetoed the measure.
President-elect Donald Trump will take office within the 60-day window required for a successful CRA, so the current rules around the 45X credit are at risk.
