Published
December 15, 2023
The House Select Committee on the CCP on December 12 issued a report with a broad array of recommendations for U.S. policy toward China. The report, “Reset, Prevent, Build: A Strategy to Win America's Economic Competition with the Chinese Communist Party,” outlines more than 150 recommendations to “fundamentally reset the United States’ economic and technological competition with the People's Republic of China.”
Heavy Hand of the State: The U.S. Chamber has tracked the PRC government’s increasingly heavy hand in economic decision-making over the past decades, and during this time we’ve issued a small library of reports cataloguing the business community’s concerns about its unfair trade and economic policies. These concerns include China’s:
- Deployment of hefty industrial subsidies and other state capitalist approaches to economic policy;
- Efforts to promote self-reliance and “indigenous innovation” through policies that discriminate against foreign companies, such as “Strategic Emerging Industries” and “Made in China 2025;”
- Agenda for digital decoupling under the guise of national security that has fueled the deglobalization of the ICT tech stack in China and globally;
- Use of competition policy as a tool not to promote competition but to favor its national champions in China and abroad; and
- China’s Military-Civil Fusion doctrine, effectively coopting the civilian economy as an organ of military development.
Welcome Recommendations: Against that backdrop, the U.S. Chamber welcomes several recommendations issued by the Select Committee, including:
Seek New U.S. Trade Agreements with Allies and Partners: The Committee recommends that Congress “enact legislation setting negotiating priorities and a process for congressional consideration of comprehensive bilateral trade agreements,” which was last enacted by Congress in 2015 as the Bipartisan Congressional Trade Priorities and Accountability Act (known as TPA). The report lists the UK and Japan, among others, as targets for new comprehensive trade agreements. The Chamber has argued forcefully for such an ambitious trade agenda.
Pass Other Trade, Tax Bills to Enhance U.S. Commerce Worldwide: The Committee issues a very welcome call for Congress to:
- Reauthorize the Generalized System of Preferences (GSP), which lapsed three years ago and for which the Chamber has been vigorously lobbying;
- Approve the Chamber-endorsed Medical Supply Chain Resiliency Act, which would not only incentivize the diversification of U.S. supply chains away from China but strengthen trade ties with friends and allies to spur growth and jobs;
- Enact the widely supported United States-Taiwan Expedited Double-Tax Relief Act, which would end double taxation of income earned by U.S. firms doing business in Taiwan and vice versa; and
- Pass H. Res. 270, “which provides that the United States should negotiate strong, inclusive, forward-looking, and enforceable rules on digital trade and the digital economy with allies and partners.” The Chamber has been very actively advocating for just such a policy on digital trade in the wake of USTR’s reversal of longstanding policies enshrined in U.S. law.
Recommendation on PNTR Repeal: On the other hand, the Select Committee also calls for a de facto repeal of Permanent Normal Trade Relations—a blunt instrument that would heap high costs on American families and businesses without achieving its intended goals relating to supply chains. The U.S. Chamber opposes such a move.
Repeal of PNTR would inflict heavy losses on American farmers and ranchers in heartland states, U.S. manufacturers of all sizes, and families struggling with high prices. While the measure’s proponents have set the laudable goal of addressing dependencies in such sectors as critical minerals, generic pharmaceutical precursors, and semiconductors, the tariff hikes that would follow from PNTR repeal would do very little to alter supply chains in these sectors.
Instead, the U.S. Chamber recommends that Congress work with the Administration to complete its ongoing four-year review of Section 301 tariffs, recalibrate tariffs to provide significant relief to American consumers and businesses, and pursue more targeted approaches through existing and new U.S. trade laws to address Chinese overcapacity and unfair PRC economic and commercial practices.
The U.S. Chamber remains committed to working with the Select Committee on the CCP — and with others in Congress and the Administration — to ensure that the United States has a fair and balanced trade relationship with the PRC that benefits the United States and promotes economic growth and prosperity.
About the authors
Charles Freeman
Charles Freeman, senior vice president for Asia at the U.S. Chamber of Commerce, has been helping companies navigate complex markets in the Asia-Pacific for 25 years. His career included senior stints in government, business, law, and academia, giving him a unique perspective on the challenges and opportunities in the world’s most dynamic region.
