OPINION:
The federal government spends billions of dollars a year on tax incentives to support domestic energy and manufacturing. These incentives are meant to strengthen U.S. supply chains, support American workers and reduce dependence on foreign competitors.
Yet Chinese-controlled companies are positioning themselves to benefit.
Under the One Big Beautiful Bill Act, lawmakers explicitly restricted eligibility for key energy and manufacturing tax credits to prevent companies tied to foreign adversaries from accessing taxpayer funds. These Foreign Entity of Concern provisions were designed to ensure that federal incentives reward only genuinely American production, not foreign-controlled supply chains operating behind U.S. subsidiaries or contractual structures.
Some companies that remain controlled from abroad, particularly China, maintain U.S.-based operations, allowing them to qualify for incentives while continuing to rely on Chinese-controlled supply chains for critical components, subcomponents, minerals and long-term procurement contracts, even when final assembly occurs in the United States.
Most of us would agree that these companies are not really American, even if some of their paperwork says otherwise. Yet U.S. taxpayers end up effectively subsidizing them.
Federal tax law shouldn’t subsidize companies that contribute nothing to their country’s domestic capacity, especially when China is seeking to destroy U.S. industry while profiting off our tax dollars.
Congress knew this could happen when it passed the One Big Beautiful Bill Act. That’s why its Foreign Entity of Concern restrictions are intended to apply to the entire supply chain, including critical components and subcomponents, not just final assembly. Congressional Republicans recognized that a company’s control and ownership, and where it makes key decisions, matter.
The task now at hand for the Trump administration is to apply the law literally. It must evaluate who ultimately controls each of these companies, where their supply chains are anchored and whether they can operate independently of Chinese-controlled inputs and contractual dependencies.
Having a shell U.S. address shouldn’t be enough to gobble up U.S. taxpayer dollars.
U.S. AIR FORCE COL. ROBERT L. MANESS (retired)
Gulfport, Mississippi
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