Tax credit for advanced manufacturing now blocked for foreign supply chains
H.R. 2871 — Safeguarding U.S. Supply Chains Act · Filed by Max Miller (R-OH) · Introduced Apr 10, 2025 · Referred to committee
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What it does
This bill amends the advanced manufacturing production credit (Section 45X of the tax code) to bar companies from claiming the credit for components produced by or involving foreign entities of concern, as defined in the 2021 National Defense Authorization Act. It applies to all eligible components and specifically to battery components, effective immediately upon enactment.
Why we flagged it
The bill's operative mechanism is a targeted tax-credit restriction designed to enforce supply-chain security by penalizing manufacturers who source from or partner with foreign entities of concern. It is a regulatory use of tax policy to achieve national-security objectives, not a general tax cut or subsidy.
What the text implies
- The definition of 'foreign entities of concern' is imported from Section 9901(8) of the 2021 NDAA; changes to that definition in future legislation or regulatory interpretation will automatically alter the scope of this credit restriction without requiring amendment to the tax code.
- Manufacturers may face compliance costs in auditing supply chains and documenting the origin and technology provenance of components, particularly for battery components where technology licensing chains may be complex.
- The restriction applies retroactively to components 'produced and sold after' enactment, potentially affecting contracts already in negotiation or production pipelines.
- Battery component manufacturers may face particular pressure to re-source or re-engineer if current suppliers or licensed technologies are designated as foreign entities of concern, creating short-term supply disruption risk.
Section numbers refer to the bill text the analysis read — linked under Primary records below.
Who it affects
Citizens may benefit from supply-chain resilience and reduced dependence on foreign adversaries, potentially lowering long-term national security risks and supporting domestic manufacturing jobs. However, the bill may increase costs for manufacturers, which could be passed to consumers through higher prices for advanced manufacturing goods, and the definition of 'foreign entities of concern' is delegated to an external statute, creating uncertainty about scope and application.
Who stands to gain
- domestic advanced manufacturing companies
- domestic battery component manufacturers
- domestic semiconductor and electronics manufacturers
Named in the bill
Internal Revenue Service, Section 45X (advanced manufacturing production credit), Section 9901(8) (William M. Mac Thornberry National Defense Authorization Act for Fiscal Year 2021), foreign entities of concern (as defined in 2021 NDAA)
Where it stands
- Apr 10, 2025 — Introduced · Congress.gov: “Introduced in House”
- Apr 10, 2025 — Referred to House Committee on Ways and Means · Congress.gov: “Referred to the House Committee on Ways and Means”
Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.
How this was measured
Analysis — Quorum's AI read the bill text published by Congress.gov (1,409 characters) on Aug 14, 2026. Section numbers in the findings refer to that text, linked below; transparency and hidden-provision scores are compared against the median of 16,222 analysed bills.
Status and sponsors — Congress.gov's bill record — actions, committee referrals and cosponsors — loaded nightly. The timeline shows status changes, not every procedural action.
As of — page rendered 2026-10-20.
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