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Advocates for the manufacturing sector have praised the advancement of President Trump’s “big, beautiful bill” as a landmark moment for the sector, but at least two provisions could cut the ebullience for some factory owners, depending on what they produce and their company structure.
The dynamic appears particularly acute for green energy manufacturers, as well as for multinational manufacturers with facilities both in the US and elsewhere.
Both are set to eat some proverbial spinach alongside the range of goodies clearly on offer in the 1,000-plus-page package.
Overall though, the focus from many is on tax provisions in the bill that could boost company bottom lines, like an increase in the pass-through deduction as well as tax credits for things like depreciation, interest payments, and factories.
“In short, this is a manufacturers’ bill,” said Jay Timmons, the National Association of Manufacturers president, touting the tax credits in particular that will be implemented if they are eventually signed into law by the president.
Yet some were quick to point out that other subsectors will face challenges. None more so than green energy, with the bill set to include a rollback of clean energy credits implemented during the Biden administration for things like the making of solar panels and electric vehicles.
“These are just massive headwinds for US manufacturing clean energy, which was already facing a tough global environment,” said Alex Jacquez, a former special assistant to Biden for economic development and industrial strategy, in an interview.
Passage of the bill as it is could lead to “much lower levels of ongoing investment,” he added, as well as outright project cancellations “for sure.”
And markets may agree, to an extent. Clean energy stocks were down this past week, with solar stocks especially hard hit after the bill advanced.
Overall, the bill has a range of provisions for factory owners, most notably a new plan for 100 per cent expensing for structures that could be felt quickly.
This would allow companies to immediately deduct the costs of building new factories and updating existing ones, with the credit currently set to be in force from 2025 through 2028.
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