US President Donald Trump wants to offer tax credits to encourage American companies to move factories out of China.
He also threatened to withdraw government contracts from companies that continue to outsource work to China.
In a speech on Monday, Mr. Trump pledged to create 10 million jobs in 10 months by declaring “we will end our dependence on China”.
This is his latest attack on China, following actions involving tech companies TikTok, WeChat and Huawei.
The announcement came as tensions between Washington and Beijing have escalated rapidly in recent months.
The Trump administration is now casting its net beyond the Chinese tech companies it has accused of threatening US national security.
“We are going to create tax credits for the companies that bring jobs back from China to America,” Mr. Trump said. “We built the largest economy in the history of the world and now I have to do it again.”
Chinese communications giant Huawei has been repeatedly attacked by the U.S. government and on Monday new restrictions were placed on the company to limit the electrical components it can purchase.
The Trump administration has also threatened to include more Chinese tech companies on its blacklist of companies facing bans in the United States, alongside TikTok and WeChat,
As the November US presidential election looms, Mr. Trump has raised the bar by targeting China, accusing its companies of stealing American jobs and intellectual property.
In Monday’s speech, Mr. Trump added that “we will manufacture our drugs and critical supplies right here in the United States.”
Many well-known American products are made overseas for American consumers, a business strategy known as outsourcing.
The most valuable state-owned company in the United States, Apple, uses a Taiwanese company called Foxconn to manufacture the majority of its best-selling iPhones. Foxconn has factories in China and Taiwan.
Other iconic American brands, including Nike, also have large manufacturing plants in China as well as other parts of Asia.
Global brands have re-examined their Chinese operations amid the coronavirus pandemic after temporary factory closures caused major supply chain disruptions.
China is often referred to as a “global factory,” but its share of global exports has been affected by the trade dispute with the United States and the coronavirus pandemic.