As an American citizen and a Michigan resident opposed to communist China’s subnational incursions into our country, specifically, and the People’s Republic of China (PRC), generally, I was both heartened and saddened by Steve Cortes’s May 22nd American Greatness article, “Don’t Fund Chinese Companies in the Tax Bill.”
I was heartened because a strong proponent of American workers and religious freedom once more warned against the suicidal insanity of corporate and political elites economically empowering a genocidal communist regime engaged in unrestricted warfare against our nation with the express intent of destroying the “hegemon” and, further, the rules-based international order. So, too, Mr. Cortes did his part to help pierce the corporate media’s muted coverage of how my home state of Michigan is a regrettable example of American elites’ prioritizing corporate and government revenues over America’s national security.
Mr. Cortes begins by citing the strategic threats posed by the PRC’s access to our economy and government:
“First, it compromises our industrial base because threats of espionage and sabotage follow those acquisitions and capital flows… Second, granting access to U.S. markets grants legitimacy and financial power to one of the most brutal and repressive regimes on earth, one that grows increasingly blunt in its anti-American posture. America should not be in the business of financing an enemy.”
His logic is eminently sound, as is his analysis of both the pending tax bill:
“Now, the new reconciliation bill, deemed the “Big Beautiful Bill,” just passed in the House—and it fails to fix loopholes created by the Biden administration’s Inflation Reduction Act (IRA). As this legislation moves to the Senate, it leaves the window open for Chinese companies to benefit from massive U.S. tax credits, specifically the 45x Advanced Manufacturing Production Credit, an uncapped incentive program for certain manufacturing projects.”
His solution is eminently sensible:
As a first step, the Senate must mandate no U.S. tax credits to any PRC-affiliated companies. None. Moving further, they should stop PRC companies from further infiltrating America’s industrial base and block U.S. companies from working domestically with any company listed by the Department of Defense as a Chinese Military Company or that is considered a foreign entity of concern.
Yet, implicit within Mr. Cortes’s heartening article was the heartbreaking reality that he was compelled to write it at all. For, as he baldly asks, “So, will the Senate protect America? Will the Senate stop China’s malicious efforts to dominate America’s critical technologies?” Or, as he warns, will “the American taxpayer [stay] on the hook for funding our foremost adversary?”
Hence, the heartbreak—and heartburn—that such questions should even need to be asked.
Almost a year to the day Mr. Cortes’s article was published, I had written about how Detroit and the entire state of Michigan—America’s “Arsenal of Democracy”—had been gutted and infiltrated by the PRC’s subnational incursions and predatory trade practices, including industrial espionage.
But that was during the Biden administration, shortly after the then-Democrat-controlled Congress passed the misleadingly named “Inflation Reduction Act.” Among its many harmful provisions, it enabled states like Michigan to allow U.S. companies to partner with PRC entities, including taxpayer funding and tax exemptions for that purpose. It was no accident that two of the most aggressive states in pursuing such partnerships—Michigan and Illinois—were under full Democratic control at the time. But, make no mistake, there were also Republican governors and legislatures that were eyeing that poisonous cookie jar.
As I noted at the time, the rationale for the corporate and political elite was short-sighted venality: the corporations received profits, and the government received revenues and the ability to claim they were “creating jobs.”
Mr. Cortes’s piece reminded everyone that corporations will continue to do business with the PRC regardless of the national security consequences unless and until the politicians stop them. Now, even with President Trump’s re-election and the appointment of staunch anti-Communist Marco Rubio as Secretary of State and National Security Advisor, Congress still has not gotten the message about the PRC. They have only gotten sneakier in how they cater to corporate America’s heedless collusion with one of our nation’s most dangerous, avowed enemies.
According to Mr. Cortes’s analysis:
“While Chinese companies cannot receive tax credits on their own, they can easily bypass these restrictions by establishing joint ventures or taking advantage of projects that license Chinese technology to receive tax credits for at least two more years… Under the House-passed bill, U.S. companies that receive ‘material assistance’ from prohibited foreign entities like CATL will remain eligible to receive 45X tax credits for at least two years.”
And there you have it. The congressional politicians will claim victory in ending tax credits for the PRC, all the while leaving in place—in fact, incentivizing—their ability to partner with American companies. Claiming to eliminate a problem while actually exacerbating it was the fundamental problem with the fraudulent “Inflation Reduction Act.” How bitterly ironic that the GOP Congress is poised to do the same in purporting to fix it.
When I first came to Congress, neither party was particularly concerned about how communist China had become a strategic threat and rival model of governance to the United States. Indeed, the uni-party’s “smart set” talked of how the U.S. had the duty to usher the PRC onto the world stage. My position was and remains that it is the job of the U.S. to usher the PRC into history’s dustbin.
While the public has long recognized the danger posed by the PRC—starting with those of us, Republican and Democrat, living in “deindustrialized” communities and states—it seems the insular political class still does not care about protecting Americans from that genocidal regime but only about how to duplicitously posture for the next election. Thus, whatever the tax bill’s outcome, political chicanery will likely continue to transcend party lines. President Trump and Secretary Rubio have their work cut out for them—starting within their own party.
An American Greatness contributor, the Hon. Thaddeus G. McCotter (M.C., Ret.) served Michigan’s 11th Congressional District from 2003-2012. He served as Chair of the Republican House Policy Committee; and as a member of the Financial Services, Joint Economic, Budget, Small Business, and International Relations Committees. Not a lobbyist, he is also a contributor to Chronicles, frequent public speaker and moderator for public policy seminars, and a co-host of “John Batchelor: Eye on the World” on CBS radio, among sundry media appearances.