New U.S. government development agency could loan billions for reshoring, official says

U.S. government financing for reshoring projects to return critical supply chains to the United States as part of coronavirus response efforts could reach tens of billions of dollars and clients may include a projected $12 billion Taiwanese semiconductor plant in Arizona.

U.S. reshoring. TSMC secures government subsidies and picks site for $12 billion U.S. plant

The U.S. International Development Finance Corp is talking to companies about reshoring the manufacturing of personal protective equipment, generic drugs and pharmaceutical ingredients, DFC Chief Executive Adam Boehler said in an interview with Reuters on Monday.

Boehler is the agency’s first Chief Executive Officer. His nomination to lead the agency was announced by the White House on July 10, 2019 and unanimously confirmed by the Senate on September 26, 2019.

U.S. International Development Finance Corporation (DFC) is an independent agency of the U.S. Government that provides financing for private development projects. It was created by the bipartisan Better Utilization of Investments Leading to Development (BUILD) Act of 2018, which was signed into law by President Donald Trump on October 5, 2018.

DFC consolidates and modernizes the Overseas Private Investment Corporation (OPIC) and Development Credit Authority (DCA) of the United States Agency for International Development (USAID). In addition to OPIC and DCA’s existing capabilities, DFC is equipped with a more than doubled investment cap of $60 billion and new financial tools.

David Lawder for Reuters:

Boehler said letters of understanding for some initial projects could be signed within the next month. The Trump administration has been pushing here for U.S. companies and importers to move manufacturing out of China.

The agency, which opened its doors in January to boost U.S. overseas development financing efforts to counter China’s massive Belt and Road infrastructure drive, was drafted into domestic service in May, after President Donald Trump signed an executive order here under the Defense Production Act.

DFC and the Defense Department agreed on Monday to jointly administer $100 million in supply-chain reshoring funds from the $2.3 billion coronavirus legislation passed in March.

Company proposals to reshore are already pouring in, Boehler said. “The areas that have come on hot right away are on the PPE side and within the pharmaceutical value chains,” Boehler said, adding there was interest in returning some generic drug production – almost all of which is imported – to the United States.

The $100 million can be leveraged into “tens of billions of dollars” in loans by using it as a pool of capital similar to the U.S. Treasury’s backing of Federal Reserve loan facilities, Boehler said. At that scale, the agency could participate in the financing of Taiwan Semiconductor Manufacturing Co Ltd’s planned factory in Arizona.

The project is a centerpiece of the push to wrestle global technology supply chains back from China. TSMC, the world’s largest contract chipmaker, is a major supplier to Apple…

MacDailyNews Take: Spurred even more by the COVID-19 pandemic, expect U.S. reshoring of critical manufacturing to be an area of strong and growing interest.

1 Comment

  1. No, adamantly NO! The US paid profiteering corporations to offshore, now it wants to pay them to restore? That’s blatant Socialism of the worst kind: Corporate Socialism. I denounce it. If there is going to be Socialism, it must be rolled out for the working poor, the workers, not for the failing or failed corporation.
    So, by giving money to individual workers, this enriches them, allowing them to buy corporate products, thereby bailing out those corporations, by making it possible for them to reshore. This making is akin to voting with money as to which corporations will benefit. By this method to enrich the worker, the gov. first trickles down money to the worker while the worker trickles money back up to the deserving corporation. This is true Capitalist democracy based on the money vote. You vote with that money.

    New U.S. government development agency could loan billions for reshoring, official says

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