Section 1 Short title
This Act may be cited as the “Trade Encourages Allied Manufacturing and Security Act” or the “TEAMS Act”.
Trade Encourages Allied Manufacturing and Security Act
A BILL
To establish a United States strategy to counter threats to supply chains for critical goods, and for other purposes.
Sec. 2 Sense of Congress
It is the sense of Congress that—
resilient supply chains are paramount to our national security and economic security;
a coordinated and whole-of-Government approach to safeguarding supply chains will benefit all Americans and ensure disruptions are avoided or mitigated; and
the United States Trade Representative, in coordination with other appropriate interagency stakeholders, should incentivize the manufacturing of critical goods to increase manufacturing capacity of the United States, and of an ally or key international partner country, including by seeking new and revised trade agreements.
Sec. 3 United States strategy to counter threats to supply chains for critical goods
In general— In accordance with Executive Order 14017 (86 Fed. Reg. 11849; relating to America’s supply chains), the United States Trade Representative, not later than 1 year after enactment of this Act, shall develop and implement a strategy taking a governmentwide approach to support the resilience, diversity, security, and strength of supply chains.
Elements— The strategy required by subsection (a) shall include a plan to do the following:
Support a unified national effort to reduce reliance on concentrated supply chains and protect against threats from countries of concern relating to supply chains.
Support sufficient access to critical goods by mitigating supply chain vulnerabilities, including supply chains concentrated in countries of concern.
Collaborate with other relevant Federal agencies to assist allies or key international partners build capacity for manufacturing critical goods.
Incentivize through trade preferences, and identify tax incentives, loans and loan guarantees, equity investment, and other means, as appropriate—
for domestic manufacturers that manufacture critical goods to—
relocate manufacturing facilities, industrial equipment, or operations related to the production of critical goods from countries of concern to the United States or to other allies or key international partners; and
support manufacturing facilities, industrial equipment, or operations to increase the production of critical goods and meet demand for such goods; and
for domestic manufacturers that do not manufacture critical goods to make necessary or appropriate modifications to existing manufacturing facilities, industrial equipment, manufacturing technology or operations in order to manufacture 1 or more critical good.
Strengthen and increase trade and other forms of engagement between the United States and allies or key international partners in order to mitigate—
supply chain vulnerabilities; and
the effects of supply chain shocks.
Identify, in coordination with other relevant Federal agencies, actions relating to supply chains with which the United States might—
raise living standards;
increase employment opportunities;
address the underlying causes of irregular migration; and
improve critical industry supply chain response to supply chain shocks.
Protect against supply chain shocks from countries of concern relating to supply chains.
Provide recommendations to effectuate the strategy under this section.
Submission of strategy—
In general— Not later than 450 days after the date of the enactment of this Act, the United States Trade Representative shall submit to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate, and publish on the website of the Office of the United States Trade Representative, a report containing the strategy developed under this section.
Update— Not less than once every 4 years after the date on which the strategy is submitted under paragraph (1), the United States Trade Representative shall submit to Congress an update to such strategy.
Form— The report submitted under paragraph (1), and any update submitted under paragraph (2), shall be submitted in unclassified form and may include a classified annex.
Sec. 4 Allies Trade Preference Program
Authority To provide duty-Free treatment— Notwithstanding any other provision of law and subject to subsection (b), the President, acting through the United States Trade Representative, is authorized to provide duty-free treatment for any eligible article from any ally or key international partner in accordance with the provisions of this section.
Designation of beneficiary countries—
Authority to designate— The United States Trade Representative shall engage in an interagency process by which to designate an ally or key international partner described in section 7 of this Act as a beneficiary country for purposes of this section.
Countries ineligible for designation— The United States Trade Representative may not designate a country as a beneficiary country under this section if such country—
does not have a democratically elected government or a market economy;
has nationalized, expropriated, or otherwise seized ownership or control of property owned by a United States citizen or by a corporation, partnership, or association that is 50 percent or more beneficially owned by United States citizens;
affords preferential treatment to the products of a developed country, other than the United States, which has, or is likely to have, a significant adverse effect on United States commerce, unless—
the United States Trade Representative receives satisfactory assurances that such preferential treatment will be eliminated or that action will be taken to assure that there will be no such significant adverse effect; and
the United States Trade Representative reports such assurances to Congress;
is not a signatory to a treaty, convention, protocol, or other agreement regarding the extradition of United States citizens;
does not afford and enforce in law and practice internationally recognized worker rights for workers in the country; or
is a country of concern.
Eligible articles—
In general— Subject to paragraphs (2) and (3), the duty-free treatment provided under this section shall apply to any critical good that is the growth, product, or manufacture of a beneficiary country.
Rules of origin— The duty-free treatment provided under this section shall apply to any eligible article that is the growth, product, or manufacture of a beneficiary country if—
such article is imported directly from such country into the customs territory of the United States; and
the sum of—
the cost or value of the materials produced in the beneficiary country or any two or more such countries that are members of the same association of countries, plus
the direct costs of processing operations performed in such beneficiary country or such member countries,
Ineligible articles— An article may not be treated as the growth, product, or manufacture of a beneficiary country by virtue of having merely undergone—
simple combining or packaging operations; or
mere dilution with water or another substance that does not materially alter the characteristics of the article.
Definitions— In this section, the terms entered and internationally recognized worker rights have the meanings given such terms in section 507 of the Trade Act of 1974 (19 U.S.C. 2467).
Termination— No duty-free treatment provided under this section shall remain in effect after September 30, 2030.
Sec. 5 Temporary increased expensing for relocating manufacturing to ally or key international partner countries
In general— For purposes of section 168(k) of the Internal Revenue Code of 1986, in the case of any qualified United States manufacturing property which is placed in service after December 31, 2020, and before January 1, 2026—
such property shall be treated as qualified property (within the meaning of such section),
the applicable percentage otherwise determined under section 168(k)(6) of such Code with respect to such property shall be—
if placed in the United States, 100 percent, and
if placed within an ally or key international partner country, 60 percent, and
paragraph (8) of such section shall not apply.
Qualified united states manufacturing property defined— In this section the term qualified United States manufacturing property means a domestic corporation that is engaged in the business of manufacturing critical goods with property outside an ally or key international partner country that places in service tangible property within an ally or key international partner country.
Termination— This section shall not apply to any property placed in service after December 31, 2025.
Sec. 6 American security product tax credit
In general— Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:
“45U. American security product tax credit
“(a) In general—For purposes of section 38, the American security product tax credit for any taxable year is an amount equal to—
“(1) 30 percent of the qualified costs of American security products manufactured in the United States, or
“(2) 15 percent of the qualified costs of American security products manufactured in an ally or key international partner country.
“(b) Maximum credit—The aggregate credit determined under subsection (a) for any taxable year with respect to any taxpayer shall not exceed the excess (if any) of the taxpayer’s net income tax over the greater of—
“(1) the tentative minimum tax for the taxable year, or
“(2) 25 percent of so much of the taxpayer’s net regular tax liability as exceeds $25,000.
“(c) Definitions—In this section:
“(1) American security product—The term American security product means—
“(A) a critical good as such term is defined in section 7 of the Trade Encourages Allied Manufacturing and Security Act; and
“(B) at least 50 percent of the value of which shall be derived from components manufactured in the United States.
“(2) Qualified costs—The term qualified costs means costs incurred in the production of an American security product.
“(3) United states—The term United States shall include the Commonwealth of Puerto Rico and the Commonwealth of the Northern Mariana Islands.”
Denial of double benefit— Section 280C of such Code is amended by adding at the end the following new subsection:
“(i) Credit for american security products—No deduction shall be allowed for that portion of expenses otherwise allowable as a deduction taken into account in determining the credit under section 45U for the taxable”
Credit made part of general business credit— Section 38(b) of such Code is amended by striking “plus” at the end of paragraph (32), by striking the period at the end of paragraph (33) and inserting “, plus”, and by adding at the end the following new paragraph:
“(34) the American security product tax credit determined under section 45U.”
Clerical amendment— The table of sections for subpart D of part IV of subchapter A of chapter 1 of such Code is amended by adding at the end the following new item:
Effective date— The amendments made by this section shall apply to expenses made or incurred beginning on the first day of the first full calendar quarter after the date of enactment of this section.
Sec. 7 Definitions
In this Act:
Ally or key international partner—
In general— The term ally or key international partner means a country designated by the Federal Government, after an appropriate interagency consultation has taken place among relevant Federal agencies, and—
is—
a member state of the North Atlantic Treaty Organization (NATO);
a country designated as a major non-NATO ally pursuant to section 517(a) of the Foreign Assistance Act of 1961 (22 U.S.C. 2321k(a)); or
a country that is located in the Western Hemisphere and included on the list of countries described in subparagraph (B); and
is not a country of concern.
List of countries described— The list of countries described in subclause (A)(i)(III) are the following: Anguilla, Antigua and Barbuda, Argentina, Aruba, The Bahamas, Barbados, Belize, Bermuda, Bolivia, Brazil, The British Virgin Islands, Canada, Chile, Colombia, Costa Rica, Dominica, Dominican Republic, Ecuador, El Salvador, Grenada, Guatemala, Guyana, Haiti, Honduras, Jamaica, Mexico, Montserrat, Netherlands Antilles, Panama, Paraguay, Peru, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Suriname, Trinidad and Tobago, Turks and Caicos Islands, Uruguay, and the sovereign government recognized by the United States in Venezuela.
Concentrated— With respect to a supply chain, the term concentrated means a supply chain that is—
under a level of control or influence by the government of a country of concern that presents an unreasonable risk to national security or economic security; and
subject to undue manipulation by the government of a country of concern.
Country of concern— The term country of concern means a country in which a concentrated supply chain is located and—
that poses a significant national security or economic security threat to the United States; and
whose government, or elements of such government, has proven, or has been credibly alleged to have, committed crimes against humanity or genocide.
Critical good—
In general— The term critical good means any raw, in process, or manufactured material (including any mineral, metal, or advanced processed material), article, commodity, supply, product, or item of supply that—
the absence of which would have a significant effect on—
the national security or economic security of the United States; and
critical infrastructure; and
is designated as a critical good in accordance with the requirements of subparagraph (B).
Designation requirements— Not later than 270 days after the date of the enactment of this Act, the President shall—
designate critical goods for purposes of this Act;
provide for a period of public comment and review in carrying out clause (i); and
update the designations made under clause (i) not less frequently than once every four years.
Critical infrastructure— The term critical infrastructure has the meaning given to that term in the Critical Infrastructures Protection Act of 2001 (42 U.S.C. 5195c(e)).
Manufacture— The term manufacture means any activity that is necessary for or incidental to the development, production, processing, distribution, or delivery of any raw, in process, or manufactured material (including minerals, metals, and advanced processed materials), article, commodity, supply, product, critical good, or item of supply.
Supply chain— The term supply chain means a supply chain for a critical good.
Supply chain shock— The term supply chain shock includes the following:
A natural disaster or extreme weather event.
An accidental or human-caused event.
An economic disruption.
A pandemic.
A biological threat.
A cyberattack.
A great power conflict.
A terrorist or geopolitical attack.
A public health emergency declared by the Secretary of Health and Human Services pursuant to section 319 of the Public Health Service Act (42 U.S.C. 247d).
An event for which the President declares a major disaster or an emergency under section 401 or 501, respectively, of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5170 and 5191).
A national emergency declared by the President under the National Emergencies Act (50 U.S.C. 1601 et seq.).
Any other supply chain disruption or threat that affects the national security or economic security of the United States.