A top economic advisor to US President Donald Trump on Friday favoured giving tax incentives to American companies to move their economic base from China to America, amidst a new rift in the bilateral relationship over Beijing’s handling of the coronavirus crisis.
The US has expressed disappointment over China’s handling of the coronavirus pandemic which has claimed 87,530 lives in America. China has also been accused of stealing Intellectual Property and research work.
The US and China in the beginning of the year signed Phase-1 of a trade deal, ending a bitter two-year tariff war that had rattled the global economy.
“It’s not a policy yet, but we want to make America the most attractive place to do work,” White House National Economic Council Director Larry Kudlow told reporters on Friday, amidst reports that a number of companies are looking to move their manufacturing base out of China.
“I’m a believer in rewarding not punishing, so my thought is in addition to the full expensing 100 per cent capital expensing why not provide a 50 per cent discount for the corporate tax rate if you are moving from outside the US to the US,” he said.
Kudlow suggested reducing the corporate tax from the present 21 per cent to 10.5 per cent.
“Why not try for a couple of years or longer a 10.5 per cent rate which would make us extremely competitive and hospitable to new investments here or for moving expenses not only 100 per cent full expensing but also we may add some assistance,” Kudlow said.
“That’s another thought to help them come here. In other words, I want to reward not punish. Those are options. Those are options. Again this is pre-decisional; these are just things that we are looking at internally,” he said.
On Thursday, a top US senator unveiled an 18-point plan, including enhancing military ties with India, to hold the Chinese government accountable for its “lies, deception, and cover-ups” that led to the global COVID-19 pandemic.
President Trump has been pressing China to agree for an inquiry into the origin of the virus, including the allegation that it emerged from a bio-lab in Wuhan. He has threatened to cut off “the whole relationship” China.
China has denied America’s accusation of covering up the extent of its coronavirus outbreak and accused the US of attempting to divert the public attention by insinuating that the virus originated from a virology laboratory in Wuhan.
“China was the first country to report the COVID-19 to the World Health Organisation (WHO), (and) that doesn’t mean the virus originated from Wuhan… There has never been any concealment, and we’ll never allow any concealment,” Chinese Foreign Ministry spokesman Zhao Lijian said last month.
“A discerning person will understand at a glance that the purpose is to create confusion, divert public attention, and shirk their responsibility,” he said.
The novel coronavirus which originated in the Chinese city of Wuhan last year has claimed 307,666 lives and infected more than 4.5 million people globally, according to Johns Hopkins university data.
The US is the worst affected country with 87,530 deaths and over 1.4 million infections reported so far.