The Western Hemisphere Nearshoring Act incentivizes companies to relocate manufacturing operations from China to Latin America and the Caribbean through financial assistance, tax incentives, and expanded trade agreements to strengthen regional supply chains and economic security.
Mark Green
Representative
TN-7
The Western Hemisphere Nearshoring Act aims to strengthen regional economic ties and national security by incentivizing companies to relocate manufacturing operations from China to Latin America and the Caribbean. The bill provides financial assistance, tax incentives, and duty-free trade benefits to qualifying businesses that shift their supply chains to the Western Hemisphere. Additionally, it mandates the pursuit of new regional trade agreements and energy cooperation to foster economic growth and reduce dependence on foreign adversaries.
Western Hemisphere Nearshoring Act: New 15-Year Tax Breaks and Low-Interest Loans to Move Manufacturing from China to the Americas
The Western Hemisphere Nearshoring Act is a major push to rewire where our stuff gets made. The bill sets up a massive financial pipeline to help companies pack up their operations in China and move them to Latin America or the Caribbean. We’re talking serious perks: the U.S. International Development Finance Corporation (DFC) would be required to set aside at least 10% of its annual funding for these moves, offering interest rates as low as the federal funds rate—which is usually way cheaper than a standard commercial loan. To keep things moving, the bill also dangles a 75% 'bonus depreciation' tax break through 2038, allowing businesses to write off the costs of new equipment and facilities almost immediately.
The 'Made Nearby' Discount
One of the biggest shifts in this bill is the 15-year duty-free pass for relocated companies. If a business moves from China to a qualifying neighbor—like Mexico, Costa Rica, or Panama—the President can declare their goods duty-free for over a decade. For a local construction worker or an office manager, this could eventually mean more stable prices on imported goods that don't have to cross the Pacific. However, the bill is strict about who gets the cash: companies cannot be state-owned, and they lose all benefits if they fall under the control of the Chinese or Russian governments. Within two years of getting aid, they have to prove they’ve actually moved their assets out of China (SEC. 5).
Jobs: Here, There, or Everywhere?
While the bill aims to create American jobs by strengthening regional trade, the actual work is being moved to our neighbors to the south. The bill requires the Secretary of Commerce to certify that these moves won't hurt U.S. employment, but it doesn't get into the weeds of how that’s measured. For someone working in a domestic factory, the question is whether 'nearshoring' to Latin America helps the U.S. economy by lowering costs, or if it simply moves jobs that could have come back to Ohio or Georgia to places like Guatemala instead. To qualify for the help, companies must create jobs in the new host country 'proportional' to the aid they receive, aiming to curb migration by boosting local economies (SEC. 5).
Paying the Bill with Tariffs
In a bit of creative accounting, the government plans to fund this entire relocation program using the tariffs we already collect on Chinese imports. Section 6 creates a new Trust Fund that catches these tariff dollars and uses them to offset the costs of the low-interest loans and tax breaks. It also opens the door for some high-tech exports, authorizing the President to negotiate the sale of nuclear reactors to these partner countries to help power their new industrial hubs. While it’s a strategic play to cut China out of the loop, the success of the plan hinges on whether companies find the 15-year tax holiday and cheap loans enough to outweigh the massive headache of moving a factory across the globe.