China’s Multidecade Campaign of Economic Aggression
The committee’s report accuses China of engaging in a “multidecade campaign of economic aggression” that has severely impacted American firms, dominated key global industries, and left the United States vulnerable in the event of a broader military conflict. As part of their recommendations, the lawmakers propose increased transparency, requiring publicly traded American companies to disclose their ties to China.
Furthermore, they also encourage investing more in U.S. research and manufacturing capacity to counter China’s dominance in sectors like pharmaceuticals and critical minerals. Representative Mike Gallagher, the committee’s chairman, emphasizes the importance of bipartisan support for a major China bill ahead of the upcoming presidential election, suggesting that clarifying business restrictions with China would benefit many American companies.
The Risks of Economic Interconnectedness
The report highlights the unprecedented economic interconnectedness between the United States and China. It raises concerns about the lack of a contingency plan in the case of further conflict and warns of potential catastrophic consequences if China cuts off critical shipments, such as pharmaceuticals and minerals, to the United States. The report further criticizes China’s practice of requiring foreign companies to transfer valuable technology to local counterparts in exchange for operating in the country.
Recommendations for a New Approach
The committee’s report recommends several measures to address the challenges posed by China. These include increasing the authority of a committee that examines foreign investments for national security threats and negotiating high-standard trade agreements, particularly with Taiwan, Japan, and Britain.
However, the most significant recommendation is the phased implementation of new tariffs on China. While China received lower tariffs upon joining the World Trade Organization in 2001, the report argues that China has consistently failed to fulfill promised reforms. Therefore, the report suggests imposing a different, higher set of tariffs on China going forward.
Though increasing tariffs would face opposition from businesses and potentially slow economic growth, the report acknowledges the economic burden. It suggests that Congress consider providing additional appropriations for farmers and support for workers. The lawmakers also emphasize the need for the United States to diversify its markets and prepare for potential retaliation from China.
Paving the Way for Consensus
The report’s release signals a united front against China, as both Democrats and Republicans reached a consensus after months of negotiations. Representative Raja Krishnamoorthi, the committee’s top Democrat, hopes that this unified stance sends a strong message to the Chinese Communist Party and counters the perception that the United States is incapable of addressing challenges due to internal divisions.