A bipartisan group of U.S. lawmakers has called for significant changes in America’s economic and financial relationship with China, including the revocation of low tariff rates granted to Beijing following its World Trade Organization (WTO) entry over two decades ago. This call comes from the House Select Committee on the Chinese Communist Party, which released a comprehensive report outlining recommendations for resetting the economic dynamics between the two nations.
Key Recommendations and Economic Aggression
The 53-page report includes nearly 150 recommendations for Congress and the administration, ranging from new tariffs on Chinese chips to limiting capital and technology flows between the world’s largest economies. The report accuses China of conducting a “multidecade campaign of economic aggression,” undermining American businesses and dominating key global industries, leaving the U.S. vulnerable in potential military conflicts.
Recommendations include demands for American public companies to disclose ties to China and increased investment in U.S. research and manufacturing, especially in pharmaceuticals and critical minerals. This is to counter China’s dominance in these sectors and includes plans for economic coordination with allies in the event of a Chinese invasion of Taiwan.
Potential for Bipartisan Legislation
While many recommendations may not be adopted due to Congress’s fractious nature, the report paves the way for potential bipartisan legislation on China in the coming months.
Shifting Perceptions and Relationships
The report reflects a significant shift in bipartisan consensus towards China. The previous belief in economic interdependence as a stabilizing force has given way to concerns about China’s potential to weaponize these ties in conflict scenarios. Issues like Beijing’s subsidization of Chinese firms and intellectual property theft have exacerbated tensions.
The report highlights the unprecedented nature of the U.S.’s economic interconnection with a geopolitical adversary like China. The lack of a contingency plan for escalating conflicts is a significant concern. A key recommendation of the report is the implementation of a new set of tariffs on China. This move counters the “permanent normal trade relations” status granted post-China’s WTO accession, which the report argues did not yield the expected benefits or reforms.
Increasing tariffs on China, a major U.S. trading partner, would likely face opposition from businesses due to the potential rise in costs for imported products and the slowing of economic growth. The Retail Industry Leaders Association expressed concerns about the impact of higher tariffs on U.S. businesses and consumers. The report suggests a need for a proactive trade agenda to diversify supply chains away from China, reducing reliance and mitigating potential retaliatory actions from Beijing.
Months of negotiations between Democrats and Republicans led to this report, signifying a united front against China’s economic practices. This consensus aims to challenge the Chinese Communist Party’s perception of a divided United States, showcasing a unified approach to dealing with the challenges posed by China.