Just a few weeks after the United States elections, two new members of Congress have put their names to legislation that would prevent Chinese companies from accessing credits available under the Inflation Reduction Act.
U.S. Representatives John Moolenaar (R-MI) and Jared Golden (D-ME) introduced bipartisanship legislation to implement the Treasury Department’s final regulations on Sec. 45X Advanced Manufacturing Credits. The members of Congress argue that the Treasury Department’s rules on 45X allow companies affiliated with China to receive U.S. taxpayer money to produce clean energy components. Moolenaar represents Michigan’s Second Congressional District, home to the under-construction battery factory of Gotion High Tech, a Chinese company.
“Under no circumstances should the Chinese Communist Party (CCP) 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 rake in billions in taxpayer dollars. That is wrong and the common sense, bipartisan legislation we are introducing today will stop it,” Moolenaar said.
The legislation introduced today would make use of the Congressional Reform Act (CRA), which gives Congress the authority to disapprove executive branch regulations.
“America should be a country of producers, not just consumers,” Golden said. “That is the purpose of domestic manufacturing credits: to support the American manufacturing economy. But the Biden administration has consistently created regulatory loopholes that allow foreign-owned companies — including those with ties to hostile foreign governments — to benefit from preferential tax treatment intended for U.S. companies. The government must 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 and the Senate and signed by the President within 60 legislative days after the Section 45X rule is released by the executive branch, the rule would end.
In 2023, Congress attempted to use the Congressional Review Act to reverse President Joe Biden’s two-year pause on new solar tariffs. The effort ultimately failed when Biden vetoed the measure.
President-elect Donald Trump will take office within the 60-day period required for a successful CRA, putting the current rules surrounding the 45X credit at risk.
