House Republicans held their highly-anticipated “China Week” by approving several China-related bills while Democrats began the week pushing for the White House to close the so- called de minimis loophole through administrative action, since Republican left the legislation off their agenda. The White House delivered on Friday. [12757]
Meanwhile Speaker Mike Johnson failed to schedule any action on the looming government shutdown due to infighting in his caucus.
US Trade Representative Katherine Tai said in an interview for a Bloomberg podcast that the Administration is using a “suite of tools” to deal with China. Ms. Tai, who ion Friday announced tariffs on Chinese electric vehicles, said in the interview that tariffs are a defensive tool, but the United States also needs to play offense.
Separately, a senior US trade official reiterated US concerns about China’s non-market economy practices at the second meeting of the US-China Commercial Issues Working Group over the weekend.
Commerce Undersecretary for International Trade Marisa Lago and China’s Vice Minister of Commerce Wang Shouwen held the meeting in Tianjin, China.
During the meeting, Ms. Lago emphasized US concerns about decreasing regulatory transparency and certainty, China’s continued non-market policies and practices and overcapacity in a range of industrial sectors, all of which negatively affect US businesses and workers, according to a readout from her office.
The two sides discussed a broad range of topics affecting the U.S.-China commercial relationship, including specific issues raised by the business communities of both countries. Ms. Lago reaffirmed the goal of pursuing a trade and investment relationship with China that benefits US businesses and workers. She reiterated the US position that the Administration will not negotiate on issues related to US national security.
The meeting advanced commercial cooperation in a range of key sectors, according to the readout. In the healthcare sector, Ms. Lago highlighted opportunities for US companies to improve healthcare outcomes for patients in China, building on convenings with China’s National Health Commission, the Beijing Obstetrics and Gynecology Hospital and US and Chinese healthcare leaders and experts.
In the climate and environmental sector, the US official promoted opportunities for US companies in China to meet both countries’ shared climate goals, building on meetings with China’s Ministry of Ecology and Environment, the China Association of Environmental Protection Industry and US companies seeking to expand business opportunities in and exports to China.
The Commerce Department plans to support a related trade mission in China later this year.
The House spent Tuesday on another of its China Week bills – a measure to create a new government entity charged with pursuing Chinese companies thought to pose a national security risk – under the threat of a Presidential veto.
The Protect America’s Innovation and Economic Security from CCP Act of 2024 would establish a "CCP Initiative" within the Justice Department.
During consideration yesterday, the House approved an amendment by voice vote that would require the CCP Initiative to investigate investments made by Chinese companies and subsidiaries listed on the Commerce Department’s Bureau of Industry and Security's Entity List and the Defense Department’s PRC Military Companies list.
The Administration opposes the measure because it would essentially reestablish the China Initiative that Justice disbanded based on national security concerns in 2022, according to a Statement of Administration Policy released yesterday.
“The Administration has worked to combat threats posed by trade secret theft, hacking, and economic espionage, including by actors affiliated with the People’s Republic of China. But grouping cases in the manner contemplated by this legislation would undermine DOJ’s ability to investigate and prosecute such criminal activity, including by making it more difficult for the Department to obtain cooperation from victims and witnesses,” according to the statement.
During China week, the House passed a number of China-related bills, including the BIOSECURE Act, which would protect Americans' genetic data and US firms from predatory CCP-backed biotechnology companies.
Also approved are the
Meanwhile, Sen. Bob Casey (D-Pa) introduced legislation yesterday to strengthen US competitiveness in the global economy, crack down on trade cheating and protect against economic and cybersecurity threats from China.
The Combat Chinese Economic Aggression Act incorporates five bills: the American Industry and Technology Protection Act, Disclosing Investments in Foreign Adversaries Act, Stop Investing in Chinese Innovation and Aggression Act; Market Economy Sourcing Act and Secure Smartports Act.
The American Industry and Technology Protection Act would expand CFIUS’ authority, allowing the Committee to review all transactions from China in emerging critical technologies.
The Disclosing Investments in Foreign Adversaries Act would provide transparency into individual funds’ investments in China, Iran, Russia, and North Korea by requiring: private funds to annually disclose assets invested in each country of concern; an annual publicly available report containing a list of entities ant their assets in each country of concern; mutual funds and exchange-traded funds to publicly disclose percentage of funds’ net assets allocated in countries of concern; and companies issuing securities in US markets to disclose the beneficial owners of the issuer, intended use of the proceeds, and the countries and sectors where the proceeds would be invested.
The Stop Investing in Chinese Innovation and Aggression Act would establish a program to prohibit US firms from making investments in technologies in countries of concern and requiring US entities, including corporations, to notify the Department of Treasury of certain investments and activities in countries of concern.
The Market Economy Sourcing Act would establish a limit on the amount of content that can come from non-market economies NMEs, like China under US trade agreements.
The Secure Smartports Act would direct the National Counterintelligence and Security Center to alert the US port and shipping industry to the threat of PRC-backed shipping and logistics infrastructure, technology, and software to US supply chains to help protect against them.
The House approved legislation (HR 9456) yesterday aimed at forcing closer federal scrutiny of any Chinese investments in US farmland or the agricultural industry, despite White House opposition.
The bill was passed on a vote of 269 to 149.
The Protecting American Agriculture from Foreign Adversaries Act of 2024 is unnecessary since its two main requirements are already operationally part of the Committee on Foreign Investment in the United States process and are consistent with the nearly identical text in current law, according to a Statement of Administration Policy issued in advance of the vote.
“The Administration fully supports participation of the Secretary of Agriculture on CFIUS for certain transactions, including those involving agricultural land, agriculture biotechnology, or the agriculture industry (including agricultural transportation, storage, and processing), which has been occurring since 2021 through an agreement between the Departments,” the White House said.
“The Administration also strongly supports the requirement that the Secretary of Agriculture notify CFIUS of certain agricultural land transactions that may pose a risk to US national security, with particular emphasis on covered transactions involving agricultural land by foreign countries or entities of concern.”
House Passes China EVs Bill
The House – on a largely party-line vote – approved legislation (HR 7980) to prevents Chinese individuals and battery manufacturers in the EV supply chain from receiving tax credits under the Inflation Reduction Act.
The bill – the last in the House China Week agenda – passed on a vote of 217 to 192, with only seven Democrats voting in favor.
The White House earlier in the week issued a Statement of Administration Policy opposing the bill, saying it would raise tax on US consumers and punish auto manufacturers.
The bill “would add new, unclear, and unworkable restrictions to the Inflation Reduction Act’s Section 30D tax credit, which already includes strict eligibility restrictions for foreign entities of concern controlled by China and other covered nations,” according to the statement.
“Further, H.R. 7980 would disrupt the market, threaten the more than $175 billion in investments made to date in the US electric vehicle, battery component, and critical minerals supply chains, raise prices for consumers, slow the shift of vehicle and battery supply chains away from foreign entities of concern in covered nations including China, and undermine US national security.”
Separately, Sens. Marsha Blackburn (R-Tenn) and Gary Peters (D-Mich) sent a letter to several Chinese automakers urging them to make their ties to the Chinese Communist Party clear and highlighting the national security concerns these ties raise if their vehicles are imported into the United States.
The Chinese Communist Party’s control of industry in China poses serious concerns that the CCP could leverage certain connected technology to access sensitive personal data and critical infrastructure, according to the two senators. If Chinese-made connected cars proliferate in the United States, the CCP could theoretically control or disable these vehicles at will.
The senators sent the letter to Geely Holding, Great Wall Motors Group, SAIC Motor, Chery Automobile, FAW Group, Dongfeng Motor BYD and GAC Group.
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