Senate Democrats Want to Invest $350 Billion to Grow U.S. Industrial Capacity and Counter China

By Elizabeth Brotherton-Bunch
Sep 17 2020 |
Senate Democrats want to spend $300 billion to invest in science and technology, with an additional $16 billion specifically to bolster semiconductor production. | Getty Images

Senators say President Trump has been “all bluster” when it comes to China.

Senate Democrats introduced legislation on Thursday to invest $350 billion to strengthen America’s industrial capabilities while also aiming to weaken China’s dominance of supply chains and growing global influence.

Sen. Robert Menendez (D-N.J.), ranking member of the Senate Committee on Foreign Relations, officially announced the legislation during a panel hearing centered on China. The “America LEADS Act” seeks to make the United States more competitive while also investing in America’s allies and partners and ensuring “China pays a price for its predatory actions.”

The legislation sets out to do a lot. Not only does it include $300 billion to invest in science and technology – and another $16 billion specifically for the U.S. semiconductor industry, a sector China’s regime is out to dominate – it also would provide $125 million in military spending in the Indo-Pacific region to counter China’s rise there.

In addition, the bill would require the president to send a plan to Congress to use the Defense Production Act to increase production of semiconductor devices. It would require domestic sourcing for those products, and also require the Defense Department to buy certain items from the United States or “friendly nations” rather than China.

“America LEADS provides a comprehensive and coherent strategic approach for addressing the new, competitive, U.S.-China relationship and to define policies and allocate critical resources that combine and mobilize all aspects of U.S. national power, starting with a recognition that American competitiveness starts with investments here at home in our workers, in education, in science and technology, and in innovation,” Menendez said.

Senate Minority Leader Chuck Schumer (D-N.Y.), who long has advocated for getting tougher on China, is teaming with Menendez to introduce the measure. Schumer told The New York Times that the legislation “counteracts the Chinese Communist Party’s predatory trade practices and aggressive military behavior, reinvigorates our alliances and turns the tables by making essential investments in our workers, entrepreneurs and manufacturers.”

Another notable part of the bill? It includes language to address China’s alleged genocide of the Muslim Uighur minority in the Xinjang region. The legislation would require the president and secretaries of Commerce and Treasury to “submit reports identifying individuals knowing engaged in or facilitating forced labor in China and impose sanctions on them,” the Times reported.

Although the measure is full of ambitious ideas, it also is pretty partisan, and unlikely to become law this congressional session, given that Republicans control the Senate.

Both Schumer and Menendez described the bill as a pivot from President Trump’s approach on China, which Menendez described as  ‘all bluster and tactics, no strategy.’” The duo also argued that Trump has failed to make the types of investments domestically that encourage job growth and U.S. competitiveness.

But as the Times also pointed out, there is a growing bipartisan consensus on Capitol Hill that more must be done to counter China. Earlier this summer, our own team even brought together a group of four wildly different Senators to talk about the need to do just that!

And specific parts of the America LEADS Act closely mirror pieces of legislation that do have bipartisan support, like a bill introduced this summer that seeks to reshore more semiconductor manufacturing. There also has been bipartisan condemnation of China’s treatment of the Uighurs.

In any case, the legislation is further proof that a real shift is happening on Capitol Hill when it comes to China – and growing recognition about the need to invest in America’s own industrial capabilities in order to properly take on China’s authoritarian regime.

These are issues that are not going away, and will be something lawmakers will have to take serious steps to address in the coming years, no matter who wins the White House and takes over on Capitol Hill after November’s elections.