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To Do: Move Chinese Production to U.S. “Labor Surplus Areas”

To Do: Move Chinese Production to U.S. “Labor Surplus Areas”
Knowledge Base Article in: Tech Policy To-Do List
Last Updated: February 8, 2025

Recommendation

Congress should pass a time-limited tax incentive for firms to move Chinese production to U.S. Labor Department-designated “labor surplus areas.”

Details

Historically, many have argued for free trade agreements because they believed Americans would broadly share in the economic gains. However, the recent waves of globalization have not worked in favor of American workers. As such, Congress should pass a time-limited tax incentive for firms that move Chinese production to U.S. Labor Department–designated “labor surplus areas.” The incentive should be established as a reverse auction tax credit based on the amount of value-added production located to a qualified labor market area.

Keep reading:

Robert D. Atkinson, “Killing Two Birds With One Stone: Why Congress Should Establish a Tax Incentive For Companies Reshoring Production from China to U.S. Labor Surplus Areas,” ITIF, March 7, 2021, https://itif.org/publications/2021/03/07/killing-two-birds-one-stone-why-congress-should-establish-tax-incentive/.

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