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

The U.S. House of Representatives held hearings Wednesday on several proposals regarding trade with China, including possible restrictions that could limit Chinese electric vehicles on U.S. streets, block Chinese semiconductors and components from U.S. market and impose fees on Chinese-made ships seeking to dock. in American ports.

In a day marked by multiple House hearings, federal officials and members of Congress repeatedly stressed the need to address national security risks and unfair trade practices posed by technology sectors Chinese.

Commerce Secretary Gina Raimondo told a House subcommittee that her department intends to implement regulations on Chinese electric vehicles regarding data collection and confidentiality issues.

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“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 developing, she said, could cover “everything from banning Chinese electric vehicles on U.S. roads to regulating their software — perhaps all the 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.”

“We are very aggressive” on new restrictions on Chinese-made electric vehicles, US Commerce Secretary Gina Raimondo said. Photo: AP alt=”We are being very aggressive” in considering new restrictions on Chinese-made electric vehicles, US Commerce Secretary Gina Raimondo said. Photo: AP>

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 those challenges could “incite aggression.”

Krishnamoorthi advocated restoring a mechanism to protect against import surges established when Beijing joined the World Trade Organization in 2001.

“It’s 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 disruptions caused by a surge in imports from cheap Chinese manufacturing. The section expired in 2013.

U.S. Rep. Raja Krishnamoorthi, a Democrat from Illinois, has sharply criticized China’s policies. Photo: Reuters alt=US Representative Raja Krishnamoorthi, a Democrat from Illinois, sharply criticized China’s policies. Photo: Reuters>

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, accounted for 90 percent of the U.S. consumer market while Skydio, a San Mateo, Calif.-based manufacturer, had to pull out last year of the American market. due to DJI’s lower prices.

A Skydio drone that sells for $1,000 compares to a comparable DJI drone that costs $300, Khrishnamoorti said, claiming that DJI is 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 sectors that will determine future conflicts; They also said China has about 235 times more shipbuilding capacity than the United States and is investing heavily in older generation semiconductors.

Rep. Ro Khanna, a California Democrat whose district includes much of Silicon Valley, said he supports union demands for the United States to impose dock fees on ships made in China, saying that the sector was heavily subsidized by Beijing.

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

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 products made in the United States. ship 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 low cost. price,” Khanna said.

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

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

“I don’t believe 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.

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

This article originally appeared in the South China Morning Post (SCMP), the most authoritative news source on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP Facebook and website. Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.