What Trump’s “Big Beautiful Bill” Means for Manufacturing in America – And Why Global Investors Should Pay Attention
In a dramatic return to pro-growth policy, Congress has passed what’s being called the “One Big Beautiful Bill Act” (OBBBA) – a sweeping legislative package designed to accelerate domestic manufacturing, spur innovation, and strengthen America’s industrial base.
While political headlines grab the spotlight, business leaders – especially those in manufacturing – should be laser-focused on the bill’s new tax provisions, which include one of the most aggressive incentives for capital construction in U.S. history.
Whether you’re a U.S.-based manufacturer planning your next expansion or a foreign company exploring U.S. investment opportunities, here’s why this legislation matters – and what it could mean for your business.
The Driving Force: 100% Bonus Depreciation for Manufacturing Facilities
Historically, when a company builds a new manufacturing facility in the U.S., the cost of the building is depreciated over 39 years. This slow recovery of capital made large industrial projects capital-intensive and tax inefficient.
The OBBBA changes that dramatically.
What’s new:
The bill reinstates 100% bonus depreciation for manufacturing-related construction – meaning the entire cost of a new facility can be deducted in full the year it’s placed in service.
Eligibility window:
The facility must be placed in service between January 20, 2025, and December 31, 2030.
Who qualifies:
- U.S.-based manufacturers
- Foreign-owned companies investing in U.S. facilities
- Joint ventures or partnerships launching production operations in the U.S.
This provision makes building in the U.S. significantly more tax efficient – and that’s true whether you’re a legacy American firm or a European, Canadian, or Asian manufacturer looking to expand into North America.
Why This Matters for Foreign Direct Investment (FDI)
The U.S. has long been a top destination for foreign direct investment in manufacturing. Now, with the passage of the OBBBA:
- New entrants to the U.S. market can dramatically reduce their tax burden in Year 1.
- Site selection in the U.S. becomes more attractive versus Europe, Asia, or Latin America.
- Cross-border investors gain a major tax lever to help justify the cost of greenfield facilities.
Example: A German industrial machinery company investing $50 million to build a U.S. assembly plant could deduct that full amount against U.S.-sourced income – saving over $10 million in federal taxes (at a 21% rate).
This improves ROI, accelerates project payback, and creates a powerful case for locating manufacturing closer to U.S. customers.
Beyond Buildings: Expensing for Equipment and R&D
The OBBBA doesn’t just incentivize construction – it’s a full-spectrum investment booster.
Equipment
- Machinery, automation systems, robotics, and IT infrastructure used in manufacturing are all 100% deductible in year one.
R&D
- The bill restores full expensing of U.S.-based R&D costs, reversing a 2022 policy that required amortization.
- This benefits advanced manufacturers, biotech firms, and global innovators establishing research hubs in the U.S.
What This Looks Like in Practice
Example scenario:
A multinational builds a $75 million production facility in Texas and spends $15 million on equipment and $5 million on R&D.
- $75M building → Fully deductible
- $15M equipment → Fully deductible
- $5M R&D → Fully deductible
Total Year 1 deduction = $95 million
This could result in $20 million or more in tax savings, depending on structure and income. For global firms investing in the U.S., this upfront tax relief can tip the scales in favor of American expansion.
🕒 Act Fast: The Clock Is Already Ticking
To qualify, projects must be placed in service between January 2025 and December 2030. Remember to factor in time for:
- Site selection
- Environmental approvals
- Zoning and permits
- Design and procurement
- Labor and supply chain delays
Pro tip: Companies should begin planning now to meet the eligibility window and maximize their tax benefit.
Strategic Implications for U.S. and Global Firms
This legislation creates one of the most favorable tax environments in the world for manufacturing construction. It supports a range of strategic goals:
| Goal | How the Bill Helps |
| Lower CapEx Risk | Immediate tax deduction reduces upfront cost burden |
| Reshore Supply Chain | Makes U.S. builds more financially attractive than overseas |
| Expand in U.S. Market | Tax-advantaged entry point for foreign manufacturers |
| Invest in Automation | Equipment expensing accelerates digital transformation |
| Accelerate R&D | Restored expensing encourages U.S.-based innovation |
Who Should Be Paying Attention
- Manufacturing CEOs, COOs, CFOs and Controllers
- Site selection consultants and industrial developers
- Foreign firms considering U.S. joint ventures or subsidiaries
- Private equity investing in industrial platforms
- Economic development groups recruiting new investment
Final Takeaway
The One Big Beautiful Bill introduces the most aggressive pro-manufacturing tax policy in decades – and it’s open to both domestic and international investors. By allowing companies to fully deduct the cost of new facilities, equipment, and R&D in the first year, the legislation turns long-term capital planning into near-term tax advantage.
Whether you’re expanding your U.S. footprint or entering the market for the first time, this is a once-in-a-decade opportunity to capitalize on favorable policy and build for the future.
Ready to Explore the Opportunity?
If you’re evaluating U.S. manufacturing growth – either as a domestic expansion or a foreign direct investment – ARCO can help you understand your options, model your tax benefits, and develop a plan that aligns with the OBBBA incentives.
Now is the time to act. Let’s build.
Disclaimer: The information provided in this communication is for general informational purposes only and does not constitute legal, financial, tax or other professional advice. It is not intended to serve as a substitute for consultation with qualified professionals nor does it constitute a recommendation, endorsement or guarantee of any tax credit, incentive or other outcome. ARCO Design/Build makes no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the information provided for any purpose. Independent legal, financial, and tax advice should be sought to assess the applicability of any laws, regulations, or incentives to specific circumstances.