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On Dec. 12, the House Select Committee on the Strategic Competition between the United States and the Chinese Communist Party (CCP) released a report outlining a strategy for the U.S. to reshape its economic and technological competition with China. The committee is led by Chairman Mike Gallagher (R-WI) and Ranking Member Raja Krishnamoorthi (D-IL).
The 53-page report contains three "pillars" shaping the committee's proposed strategy. The pillars are resetting the terms of the U.S.-China economic relationship, reducing the flow of U.S. capital and technology that supports China's military modernization and human rights abuses, and investing in U.S. technological leadership and strengthening economic resilience among allies, according to a copy of the report.
The report said that China's economic system is "incompatible with the WTO" and threatens America's economic security, while the U.S. lacks an economic contingency plan in the event of a conflict with China. According to the report, the Chinese government uses things such as forced technology transfers and restricted market access to boost its standing in global markets and increase America's reliance on imports from China. Additionally, the report said that the "widespread adoption" of certain technologies developed in China threatens U.S. national security and presents concerns about data protection and U.S. technological competitiveness.
In order to counter China's economic and trade strategy, the report recommends that Congress move China to a new tariff column that would enable the U.S. to exert economic leverage to ensure China abides by its trade commitments and refrains from engaging in unfair trade practices. The report calls on Congress to renew the China Safeguard mechanism, which expired in 2013. The mechanism would allow the U.S. to impose tariffs or other restrictions on China if the U.S. International Trade Commission determines that Chinese imports are causing or threatening to cause "market disruption."
The report asks Congress to ensure that U.S. trade agreements with third parties, such as the U.S.-Mexico-Canada Agreement (USMCA), prevent non-market economies from using partners of the U.S. to gain backdoor access to U.S. markets. Additionally, the report calls on Congress to direct the office of the U.S. Trade Representative (USTR) to establish a comprehensive WTO dispute against China's unfair economic policies and practices. To address concerns about forced labor, the report asks Congress to reduce the de minimis threshold for shipments into the U.S.
Numerous officials and business leaders expressed their support for the report in a press release from the select committee. Ambassador Robert Lighthizer, former U.S. Trade Representative, said in a statement, "I hope the committees of jurisdiction act quickly to implement these findings and set America on a course of greater prosperity and security for all working families."
United Steelworkers International President David McCall said, "USW members can compete against anyone on a level playing field, but too often they instead face the CCP’s illegal trade practices. Our union applauds the committee’s work to safeguard domestic industries, and in particular its acknowledgment that Permanent Normal Trade Relations with China negatively impacts American workers."
