The U.S. Senate Finance Committee on Feb. 16 held a hearing on “Ending trade that cheats American workers by modernizing trade laws and enforcement, fighting forced labor, eliminating counterfeits, and leveling the playing field.”
Much of the hearing, which was gaveled in by Chairman Ron Wyden (D-Ore.), focused on the ways that China exploits trade cheats to increase its own wealth and influence.
Throughout the hearing, Republicans and Democrats agreed on the threat China poses to America’s industrial interests and sought solutions that could limit the harm China-based industry does to the U.S.
“Trade cheats in China and around the world are constantly looking for new ways to evade U.S. trade laws and rip off American jobs and American workers,” Wyden began. “They wish to sell illegal products in America—goods made with forced la for, illegally-harvested timber, and products that steal our intellectual property.”
“Trade cheats are a grave threat to the American worker–farmer and all those who play by the rules.”
Wyden said the worst offenses come in China’s western provinces, where the Central Asian Uighur minority faces systemic persecution by the communist regime in Beijing.
Over a million Uighur Muslims have been placed in what are effectively concentration camps by the Chinese Communist Party (CCP). In these camps, the Uighur’s are forced into labor and reeducation courses.
“The Chinese Communist Party’s treatment of the Uighur population is a moral abomination,” Wyden said.
“It’s awful hard to compete with slave labor,” Wyden quipped.
The effect of the CCP’s cheap slave labor, Wyden said: “Factories shuttered [and] American jobs lost to China.”
Wyden called on companies like auto manufacturers and Apple to cleanse their supply chains of forced labor. To this day, most of Apple’s technology is designed in California but manufactured in China.
China-manufactured car parts are particularly tainted by slave labor, Wyden added.
The U.S. auto industry is too important, Wyden said, “for those jobs to be ripped off and sent to an economy that by strategy—by strategy—pays nothing.”
Wyden said that the front lines of the battle to fight trade cheats is at ports of entry, both land ports along the southern border and sea ports along the west coast.
He proceeded to list a litany of trade abuses.
“Counterfeiters rip off American products, posing an economic and health risk to American citizens. Intellectual property theft is estimated to cost the U.S. economy $600 billion every year, much of that from China.
‘Opportunists’
In his opening remarks, Ranking Member Mike Crapo (R-Idaho) emphasized that the United States has not updated its trade laws for over 30 years.
“Opportunity is out there, right now, waiting for the law to catch up with it,” Crapo said. “The last modernization [of U.S. trade law] could not foresee the tools available to us today, or the sheer number of small businesses that take advantage of international trade, or the benefit to consumers from widespread access to e-commerce.”
But, Crapo continued, “With any new opportunity comes opportunists.”
US—Mexico Border
Crapo also noted the burgeoning drug crisis caused by the flow of extremely dangerous drugs like fentanyl across the southern border.
“Between August of 2021 and August of 2022, 107,735 American lives were lost to drug poisoning,” Milgram said.
“Perhaps the most important thing I can tell the committee today—we know who’s responsible: the Sinaloa Cartel and the Jalisco (CJNG) Cartel, both cartels in Mexico, are responsible for the vast majority of fentanyl that is coming into the U.S.,” Milgram said. “It is why DEA has made defeating those two cartels our top operational priority.”
These cartels “dominate the global fentanyl supply chain,” she added.
Crapo related reports that in January 2023 alone, Customs and Border Protection (CBP) at the El Paso, Texas, port of entry “seized over 320 pounds of methamphetamine, 139 pounds of cocaine, and 42 pounds of fentanyl.
Like many other Republicans, Crapo argued that the solution to this problem is to enhance security on the southern border.
After he took office, President Joe Biden made radical changes to U.S. immigration policy. Under President Donald Trump, the U.S. had enforced a “Remain in Mexico” policy, whereby would-be asylum seekers were required to stay in Mexico until their asylum request had been approved or denied.
Under Biden, Border Patrol agents have been directed to move to a “catch-and-release” policy, whereby anyone claiming asylum can be apprehended crossing the border but then released into the country to await their day in court as the merits of their claim are assessed.
“We’ve got to close the flow of these drugs over our southern border,” Crapo said.
Republicans and Democrats alike on the panel called for the United States to modernize its customs enforcement to address the challenges, not only of drugs pouring over the U.S. border with Mexico but also Chinese counterfeits and corporate moves to cheaper markets in Asia.
The push, led by Senate Democrats, comes after Biden suggested in his State of the Union address that increasing U.S. manufacturing would be a priority of his administration during the second half of his first term.
“Where is it written that America can’t lead the world in manufacturing?” Biden said.
“For too many decades, we imported products and exported jobs,” Biden said. “Now, thanks to what you’ve all done, we’re exporting American products and creating American jobs.”
In particular, Biden pointed to the CHIPS Act, which he said would bring thousands of jobs to Ohio.
Later, Biden called for a made-in-America policy that won a round of applause from Republicans.
“We’re gonna make sure the supply chain in America begins in America,” Biden said.
“We’re gonna buy American,” Biden said later.
“I’m requiring that all construction products used in federal projects are made in America.”
The 118th Congress is split, with Republicans holding the majority in the House and Democrats holding the majority in the Senate.
Biden, Senate Majority Leader Chuck Schumer (D-N.Y.), and Speaker of the House Kevin McCarthy (R-Calif.) have expressed hope that they can work together to achieve shared goals.
“To my Republican friends, if we could work together in the last Congress, there is no reason we can’t work together in this new Congress,” Biden said during the State of the Union.
Republicans gave the comment a standing ovation—a good sign for Biden as he tries to move forward with a divided Congress.
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