WASHINGTON—A bipartisan group of lawmakers in Congress are calling for the United States to “reset” its relationship with China by raising tariffs and cutting off capital flows fueling aggression by the communist regime.
In a report incorporating nearly 150 recommendations on Dec. 12, the House Select Committee on the Chinese Communist Party warned about the regime’s “multidecade campaign of economic aggression” that has made the United States dependent on Beijing—to its peril.
Among the list of recommendations from the 53-page report are closing the loopholes that allow Beijing to steal U.S. technologies, forcing a ban or divestment of Chinese-owned social media app TikTok, imposing tariffs on legacy Chinese semiconductors, and directing the Federal Reserve to stress test its resilience to a potential loss of access to the Chinese market.
Committee chairman Rep. Mike Gallagher (R-Wis.) described the report as a blueprint to “turbocharge the American economy for decades to come.”
“The status quo is not working,” he told reporters on Dec. 12. “We shouldn’t have wasted a day, let alone a decade on that old bet.”
Mr. Gallagher made clear that he wasn’t asking for a complete decoupling. He has “no problems with Wisconsin farmers selling soybeans to China” or “Americans buying cheap textiles or toys in China—as long as they’re not made with slave labor,” but more economic interaction won’t make the Chinese regime less repressive internally and less aggressive externally.
“The United States now has a choice: accept Beijing’s vision of America as its economic vassal or stand up for our security, values, and prosperity,” Mr. Gallagher and ranking Democratic member Raja Krishnamoorthi of Illinois said in the report.
Mr. Gallagher said Republicans are having a “robust discussion” with relevant stakeholders about the best path forward on restricting outbound investment toward China. A measure regarding the issue was dropped from the annual National Defense Authorization Act, but the lawmaker hopes to see some “responsible legislative activity” in the first quarter of the coming year.
“Even those major asset managers or bankers with whom we’ve engaged that are skeptical of any restrictions on investment in China, even in military and critical technological areas, I think would welcome the predictability that legislating the issue would provide,” he said.
The report signals a shift of bipartisan view on how to approach China that contrasts with the decades-long U.S. thinking that economic cooperation would be mutually beneficial and lead to a more open China.
Instead, since China entered the World Trade Organization in 2001, the Chinese regime has increasingly weaponized the economic reliance to undercut U.S. national security and values, according to the report.
The heavy U.S. dependence on China for pharmaceutical ingredients exposes Americans vulnerable to contamination risks, the report states, and China’s dominance on medical devices is similarly troubling in light of how it blocked exports of critically needed medical equipment during the height of the COVID-19 pandemic.
The lesson, according to the report, is that the United States must “act now to build an economic contingency plan and reduce its dependence on the PRC [People’s Republic of China] in critical sectors, address the PRC’s penetration of U.S. capital markets, and build greater collective resilience with allies and partners.”
The report was lauded by a number of industry groups and those who had been advocating for a tougher stance on China.
Joseph Cella, former ambassador to Fiji, Kiribati, Nauru, Tonga, and Tuvalu, said it offered “a clear-eyed view of the perilous terrain we are on with China in this new Cold War, particularly when it comes to state level incursions and influence operations.”
David McCall, president of United Steelworkers International, said they appreciate the committee’s efforts to “hold the CCP [Chinese Communist Party] accountable and protect American workers” because although its members can “compete against anyone on a level playing field ... too often they instead face the CCP’s illegal trade practices.”
Kim Glas, president and CEO of the National Council of Textile Organizations, said he believes that the policy recommendations from the committee can help address the economic headwinds brought by predatory Chinese trade practices.
“The U.S. textile and apparel manufacturing sector has been on the receiving end of some of the worst predatory trade practices by China, including substantial intellectual property theft, coupled with rampant abuse of state-owned enterprises and subsidies, and horrifying labor abuses in Xinjiang, which have enabled the country to dominate world markets in this sector,” he said.
The committee isn’t alone in hoping to curb investment funds going to China.
On Dec. 12, Sens. Marco Rubio (R-Fla.) and Rick Scott (R-Fla.), as well as Rep. Elise Stefanik (R-N.Y.), introduced the American Investment Accountability Act, to ensure that Congress is informed about outbound investment data into China.
