A House subcommittee examined how China undercuts American workers, and the bipartisan policies needed to help the U.S. compete.
The House Ways and Means Subcommittee on Trade held a hearing on Thursday to discuss efforts to support U.S. workers and businesses – along with the environment — in the face of China’s continued unfair trade practices.
With expert witnesses from industry, labor and academia, Members of Congress discussed policy responses to a wide array of trade issues that the United States and other countries have suffered under due to actions by China’s authoritarian government, including illegal and anti-competitive state subsidies, intellectual property theft, and the use of forced labor.
It is critical that the U.S. works to address these actions to protect jobs from being further undercut by the Chinese government’s illegal and egregious actions and safeguard America’s national and economic security.
“Republicans and Democrats agree that China’s predatory trade policies are unacceptable and harmful to U.S. businesses and workers,” said Ranking Member Rep. Vern Buchanan (R-Fla.). “This is truly a bipartisan topic, and I appreciate the opportunity to take a subcommittee-wide look at the US-China relationship.”
The hearing comes as the world prepares to next week mark the 20th anniversary of China’s ascension into the World Trade Organization (WTO), a turning point in China’s trade relations.
China’s entry into the WTO was supposed to encourage democracy there and open its market to the world, but the opposite happened. Over the past two decades, China has repeatedly violated WTO rules and has exploited the world’s good faith to undermine proper conduct when it comes to international trade. As Foreign Affairs outlined in October, Chinese Leader Xi Jinping and his government is now working to export its model of authoritarianism.
“China continues to demonstrate that it refuses to play by the rules, that they will exploit loopholes whenever they exist,” said subcommittee chairman Rep. Earl Blumenauer (D-Ore). “We’ve given too much of a free pass to China over the years, and I believe that it’s time to take these issues seriously and take an aggressive and assertive approach.”
The stakes are high. At least 3.7 million U.S. jobs have been lost since 2001 due to the lopsided trade deficit with China, and it was such a jolt to the economy that scholars now refer to it as the “China Shock.”
But American workers stand to lose so much more if they continue to be undercut by illegal Chinese actions. Moreover, the environment stands to suffer by China’s failure to mitigate the climate crisis to the same standard that the U.S. does. Even worse, global humanitarian policies are being mocked by China, which is actively perpetrating genocide against the Uyghur people and other ethnic minority groups in the Xinjiang region.
The issue of the Uyghur internment is especially pressing when it comes to textiles, as one in five garments sold from China involves Uyghur forced labor, according to the testimony of Kimberly Glas, president and CEO of the National Council of Textile Organizations. Major U.S. brands have been implicated in the use of forced labor, all in the name of producing cheap garments at rock-bottom prices.
Meanwhile, the U.S. textile industry has also been undercut by illegal trade actions from China.
“Thanks to massive state-sponsored subsidies and rampant intellectual property theft, Chinese textile and apparel exports have exploded, making China the dominant player in the global market,” Glas said. “Virtually limitless government programs intended to ensure that China’s textile industry dominated world markets and displaced foreign competitors and workers.”
But these actions are not just limited to the textile industry. Roy Houseman, the legislative director of the United Steelworkers (USW), explained the disproportionate impacts of China’s trade violations on American manufacturing workers.
“The USW has supported the investigation and implementation of the Section 232 tariffs on steel and aluminum,” Houseman said. “Global overcapacity in steelmaking and aluminum has for too long impacted domestic industries and led to plant closures, lost productivity, lost jobs, and economic uncertainty for our industrial heartland.”
So what can Congress to do?
For one, Members need to pass the so-called “China Competitiveness Bill,” legislation to help the U.S. compete by investing in critical industries like semiconductors and supporting increased research in advanced technologies.
Clete Willems, a partner at Akin Gump Strauss Hauser and Feld LLP, recommended a three-point plan for Congress to fight these trade battles.
First, the U.S. needs to do more to grow sectors of the U.S. economy that China is seeking to undermine globally — especially manufacturing. Second, the U.S. needs to directly counter China’s unfair trade policies, including by issuing investment restrictions and clamping down on forced labor. Finally, the U.S. needs to work diplomatically to ensure that China abides by the commitments it made in the “Phase One” trade deal, and ultimately expand it to address unfair trade practices.
And above all, the U.S. needs to be willing to take action when China does not abide by the rules.
“Supporting U.S. workers, businesses, and the environment in the face of unfair Chinese trade practices requires a whole of government approach,” Houseman noted. “But trade policy must lead the way.”