U.S. House panels consider ways to counter China’s security threats and ‘unfair’ trade practices

“Let’s say we had a million Chinese cars on the road, all connected, all collecting data from Americans — all of that goes back to Beijing,” she told the subcommittee on innovation, data and trade.

“So we’re very aggressive,” Raimondo said.

The rules the department is drafting, she said, could cover “everything from banning Chinese electric vehicles from American roads to regulating their software — perhaps all data must be hosted in America.”

Raimondo added that his concerns lay in “the national security issue of all this data going to the Chinese military.”

She also said the department was studying public comments on the security risks of connected vehicles, to understand the cars’ ability to communicate with external systems, potentially including data capture or the ability to remotely disable or disable handle other vehicles.

Raimondo said the department’s budget provides resources to strengthen U.S. relationships with its allies to “shape the strategic environment in which we operate vis-à-vis China.”

In another hearing, this one by the House Select Committee on China, lawmakers heard proposals from U.S. experts aimed at combating Chinese dominance in semiconductors, shipbuilding and drones .

Rep. Raja Krishnamoorthi of Illinois, the committee’s top Democrat, argued that failing to address these challenges could “incite aggression.”

Krishnamoorthi advocated for the restoration of the mechanism to protect against increases in imports, put in place when Beijing joined the World Trade Organization in 2001.

“It is time to revive and modernize Section 421,” he said, a rule created to allow the United States to impose short-term tariffs to mitigate market disruption caused by the sudden increase in imports from China’s cheap manufacturing sector. The item expired in 2013.

Krishnamoorthi accused China of denying American companies access to its market while flooding the United States with heavily subsidized products.

He noted that DJI, a Chinese drone maker that is a global leader in the industry, accounts for 90 percent of the U.S. consumer market while Skydio, a San Mateo, Calif.-based maker, was forced to pull out of the U.S. market last year because of DJI’s lower prices.

A Skydio drone selling for $1,000 compares to a comparable DJI drone that costs $300, Khrishnamoorti said, claiming that DJI was subsidized by the Chinese government.

The select committee and its witnesses appeared to agree that the Chinese Communist Party intends to control the technologies and industries that will determine future conflicts; they also said that China has about 235 times the shipbuilding capacity of the United States and is investing heavily in older-generation semiconductors.

In April, the US Trade Representative opened an investigation into China’s maritime, shipbuilding and logistics sector for “unfair and non-trade practices.”

The docking fees of about $1 million per cargo ship, Khanna said, “would be less than $50 per container, which would mean Americans might have to pay a few cents more for their jeans or shirts so we can have American-made products on our ships again.”

Khanna criticized the American Chamber of Commerce, a leading business lobby, for opposing the move.

“They testified, ‘No, we can’t pay a few cents more.’… This is the philosophy that led to the bankruptcy and deindustrialization of America for cheap labor at cheap price,” Khanna said.

“We continued to send our industry overseas, to China, and we still do.”

12:53 p.m.

‘Overtaking on a corner’: How China’s electric vehicle industry leapfrogged to dominate the global market

‘Overtaking on a corner’: How China’s electric vehicle industry leapfrogged to dominate the global market

Rep. Andy Barr, Republican of Kentucky, said he supported instituting a dock tax “because I think China is an exceptional case” but acknowledged that it was actually about a “protectionist policy” which “could evolve into something beyond China”.

“I don’t think we should try to counter China by imitating Chinese industrial policy,” Barr said.

Christopher Miller, author of Chip War: the fight for the world’s most critical technologytold the committee that while U.S. President Joe Biden’s administration has adopted some safeguards, “there is still work to be done,” particularly for semiconductors that power both drones and ships.

Miller, a professor at Tufts University’s Fletcher School of Law and Diplomacy, said that in recent years Beijing has pumped billions of dollars in subsidies into lower-tech “fundamental chips” used in everything, from cars to laptops.

“Projecting current trends, China is poised to see its share of the fundamental chip market increase dramatically,” he said.

“Some of these chips will be sold in Chinese markets, but many will be sold in Western markets unless policy changes,” he said, calling for new restrictions on overseas investment in low-end chips.

Biden issued an executive order last year that restricts U.S. investment abroad in advanced technologies such as high-tech chips, AI and quantum computing.

“Investment flows into China’s chip industry have declined significantly, and new restrictions on overseas investment will further limit any investment in Chinese chips,” Miller said.