Bipartisan lawmakers called for further economic and financial disengagement from China, including revoking low tariff rates granted to Beijing after its entry into the World Trade Organization over two decades ago.
The House Select Committee on the Chinese Communist Party released a comprehensive set of recommendations for resetting America’s economic relationship with China. The report, signed by both Democrats and Republicans, argued that China had engaged in a long-term campaign of economic aggression that undermined American companies, dominated crucial global industries, and left the US vulnerable in the event of a broader military conflict.
The 53-page report included nearly 150 recommendations for Congress and the administration to address these vulnerabilities. These recommendations ranged from imposing new tariffs on older Chinese chips to further restricting the flow of capital and technology between the two countries.
The report also suggested requiring publicly traded American companies to disclose their ties to China and investing more in US research and manufacturing to counter China’s dominance in sectors such as pharmaceuticals and critical minerals. It also proposed developing plans to coordinate economically with allies in the event of a Chinese invasion of Taiwan.
While many of the recommendations may face challenges in Congress, the report could pave the way for bipartisan legislation on China in the future. Representative Mike Gallagher, the committee’s chairman, expressed his hope for a major China bill to be passed by Congress before the next presidential election, stating that clarifying the rules for doing business with China would benefit many American companies.
The report reflects a significant shift in the bipartisan consensus on China in recent years. Previously, the prevailing argument was that economic interdependence would promote peace and stability. However, there are now growing concerns that economic ties with China could be weaponized in the event of a conflict, posing risks to the US economy and military.
The report also highlights Beijing’s subsidization of Chinese firms and intellectual property theft as sources of friction. It states that the US has never before faced such an economically interconnected geopolitical adversary and lacks a contingency plan for further conflict.
While the report does not advocate complete decoupling of the US and Chinese economies, it emphasizes the need to reduce China’s leverage and increase US economic independence. It includes various other recommendations, such as increasing the authority of a committee that reviews foreign investments for national security threats and pursuing high-standard trade agreements with countries like Taiwan, Japan, and Britain.
The report’s first and most significant recommendation is phasing in a new set of tariffs for China over a short period of time. It argues that China has failed to deliver promised reforms and that the current trade relations have not produced the expected benefits for the US. However, increasing tariffs on China would face opposition from businesses and could slow economic growth.
The report acknowledges the economic burden of such changes and suggests Congress consider additional support for farmers and workers. It also calls for the development of alternative markets and preparation for potential retaliation from China.
The bipartisan nature of the report is intended to send a message to China that the US is united in addressing the competition between the two countries.