The bipartisan House China select committee released a major new report this week calling for a full reappraisal of U.S.-China ties, the most detailed and comprehensive vision yet of how Congress could respond to the reality of global competition with Beijing.
The bipartisan House China select committee released a major new report this week calling for a full reappraisal of U.S.-China ties, the most detailed and comprehensive vision yet of how Congress could respond to the reality of global competition with Beijing.
The 53-page report is chock-full of detailed legislative proposals aimed at paring back—but not fully severing—the ties binding the two economies in the name of national security, including more tariffs on Chinese goods, securing supply chains for critical minerals, and banning TikTok, the Chinese-owned social media giant that lawmakers contend is a national security risk because of how it harvests user data.
“The United States now has a choice: accept Beijing’s vision of America as its economic vassal or stand up for our security, values, and prosperity,” the report reads.
There are nearly 150 policy recommendations in all. But even though the proposals come from a bipartisan committee, the recommendations may be difficult to turn into policy.
Some ideas, such as granting tax benefits to small companies focused on emerging technologies to compete with China, could be turned into widely popular legislation relatively quickly and to great effect with the right legislation in place; some, such as drastically boosting tariffs on China, are controversial; and others may not have a real legislative fix no matter how hard Congress tries. Regardless, the report is an important development that represents the most detailed outline to date of where most of Washington’s national security community stands on China.
“The fact that we are fully reassessing the economic relationship with China is obvious if you live and breathe the Washington blob,” said Emily Benson, a scholar at the Center for Strategic and International Studies (CSIS). “But no committee or policymaker has put out an articulation of how we are now entering a completely new chapter of U.S.-China relations like this.”
The report is the distillation of a year’s worth of hearings, travel, and research by the House Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party, a new panel that has maintained its policy-heavy bipartisan bona fides despite the hyperpartisan chaos in the rest of Congress. (There’s still a debate in and outside Washington on whether the premise and work of the committee is helping to drive the United States into an otherwise preventable cold war with China, but despite these criticisms, most lawmakers and policymakers in Washington support the committee’s work.)
The chairman of the committee, Republican Rep. Mike Gallagher, and its ranking member, Democratic Rep. Raja Krishnamoorthi, are both policy wonks who have devoted a bulk of their working hours this legislative session to the committee. As such, most of the proposals in this report are specific, concrete, substantive, and showcase an in-depth understanding of how wonky regulations and technocratic legislation have a huge impact on U.S.-China trade.
But some of the report’s biggest ideas are also the most controversial. One of the committee’s first proposals is for the United States to begin reimposing tariffs on Chinese imports at a much wider scale. The backroom dealing over how these plans are outlined in the report reveals a lot about how politically fraught this idea is. According to multiple congressional aides familiar with the matter, the committee initially wanted to call for fully revoking China’s “permanent normal trade relations” (PNTR) status. The United States formally granted China PNTR status, removing or lowering most tariffs, after Beijing joined the World Trade Organization in 2001, and it has been in place ever since, despite mounting criticism from U.S. politicians over unfair Chinese trade practices. Beijing, unsurprisingly, rejects these criticisms as unfounded.
The committee faced significant behind-the-scenes backlash over this from some of their fellow Democratic and Republican lawmakers, particularly those from rural districts that rely on agricultural exports to China and that tend to get caught in the crossfire of escalating tariff wars. Those members voiced fears of economic shocks and retaliatory tariffs from Beijing if they floated revoking PNTR as a serious policy proposal or took steps toward enacting it. In the end, the committee watered down the language of the report, calling for moving China to a “new tariff column” in the U.S. trade regime and phasing in this shift “over a relatively short period of time to give our economy the time necessary to adjust without avoidable disruptions.”
But those disruptions may not be avoidable, given how intertwined the world’s two biggest economies are. An Oxford Economics study commissioned by the US-China Business Council found that revoking PNTR status could cost the U.S. economy $1.6 trillion over a five-year timeframe and lead to the loss of 744,000 jobs.
Other concrete proposals, however, could face less political backlash but still have an outsized impact on different U.S. industries and their ties with China with more political buy-in across the board. One example: The committee calls for the expansion of the “rebuttable presumption” of the Uyghur Forced Labor Prevention Act (UFLPA) to seafoods exported by China. This is a big deal and would seem even bigger if written in English.
The UFLPA was passed to halt the import of Chinese goods made by forced labor, amid Beijing’s sweeping crackdown on ethnic Muslim Uyghurs, actions that the U.S. government classifies as a genocide. The rebuttable presumption means that companies have to proactively prove the goods they’re importing do not come from forced labor, rather than having regulators prove they do indeed come from forced labor. That means a lot more compliance work for companies.
Now to apply that to seafood: China has a massive and controversial rapacious fishing fleet that trawls the globe, flouting environmental standards and other nations’ fisheries by plundering fish stocks as far away as West African and South American waters. It’s a huge source of tension between Beijing and coastal countries seeing their fish stocks depleted right from under their noses. The House China committee’s proposals would force the seafood industry to, like the UFLPA, prove that it’s not getting fish from Chinese fishing fleets, in a bid to crack down on those fleets. The United States is the second-biggest destination for Chinese seafood exports, with a special affinity for fish fillets, especially catfish.
Whether most or all of these recommendations become U.S. law is the next big question. Unlike, say, the House Armed Services Committee or House banking committee, the House China committee has no lawmaking authority. This is a double-edged sword. It means issuing a recommendation-heavy report like this is easier. But it also means the recommendations aren’t stress-tested toward viable legislation.
Then there’s the fact that the bulk of U.S. trade policy belongs to the executive branch, not Congress. Many of the recommendations nod to this—legislation that urges the executive branch to develop strategies to deal with Chinese economic coercion or direct the administration to develop plans with allies to enact economic costs on China if it takes any aggressive actions toward Taiwan. Those recommendations won’t face much pushback but won’t have much bite, either.
Finally, there’s the question of intent versus reality. Despite all the bad blood between Washington and Beijing, the U.S.-China trade relationship remains the largest in the world, and it’s hard to legislate that reality out of existence. One big example is the broad campaign for the United States to diversify many supply chains away from China through tariffs, export controls, trade restrictions, and other initiatives—a term that policymakers refer to as “de-risking” U.S. supply chains from China.
Interviews with multiple Western trade experts and officials, as well as in-depth trade studies, show that rather than removing China from the supply chain, these initiatives have in practice simply added more middlemen and cutouts to the supply chains—and all in ways where the foundations of those supply chains are traced back to China. U.S. officials may cheer the fact that the United States now gets a certain widget from Vietnam or India instead of China, but many of the components of those widgets from Vietnam or India are still sourced in China. Even to surpass China as an export power in strategic industries, studies suggest, requires deeply entwined intermediate supply chains with China.
“Everyone realizes that there is utility in de-risking,” said Benson, the CSIS scholar. “I personally have seen very little evidence to see that de-risking is actually happening on the ground.”
What does all this mean for the House China committee and its new magnum opus? In addition to navigating tricky politics and economic realities, the committee’s members will have to game out the second- and third-order consequences of any legislation they plan to pass to see if their best-laid legislative plans will actually have the intended effect. In short, they have their work cut out for them.
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