Washington Eyes China Trade Following Debt-Ceiling Deal

Date: Tuesday, June 6, 2023
Source: Sourcing Journal

Washington lawmakers continue to call for a tariff hike on exports from China.

On Friday evening, following an historic debt ceiling deal sent to President Joe Biden’s desk on Thursday, Senator Josh Hawley (R-Mo.) delivered an address on the Senate floor calling for a 25 percent increase in duties on Chinese imports into the U.S. He wants to see the Raising Tariffs on Imports from China Act he introduced in May included as an amendment to the debt ceiling legislation, which will suspend the U.S. debt limit through Jan. 1, 2025.

Hawley believes trade ties with China are contributing to America’s economic fragility. “Our trade deficit with China, as we stand here tonight, is at near record levels,” he said. “Every dollar of that deficit represents blue-collar jobs destroyed, industry shuttered, manufacturing capacity withering away. I’d submit to you that it is the most important deficit that we face.”

America has lost nearly 4 million jobs because of over-reliance on China’s manufacturing sector, he said. “We can talk about budget reforms, and we can talk about savings here and there, but until we do the work of bringing back productive capacity to this nation… we will not put our economy on the basis that we need to address the economic challenges that we face,” Hawley said.

Congress gave China most-favored-nation trade status in September, 2000. Since then, the U.S.-China trade deficit that ballooned to average of $350 billion per year over the past decade, totaling more than $6 trillion. Hawley’s bill would place greater reporting responsibilities on the executive branch of government, requiring the president to calculate and publish the total value of Chinese imports, and the value of annual U.S. exports to China. If a deficit is recorded, the law would require the president to raise tariffs and build upon the Trump-era punitive duties implemented under Section 301 of the Trade Act. The president would be able to drop the tariffs if the U.S. records a bilateral surplus of exports to China.

Calls for further crackdowns on China are coming from both parties. On Wednesday, Senators Marco Rubio (R-Fla.) and Jeff Merkley (D-Ore.) introduced the Uyghur Genocide Accountability and Sanctions Act (UGASA), which aims to strengthen the protections afforded by the Uyghur Forced Labor Prevention Act (UFLPA), enacted in December 2021.

Mass genocide against Uyghurs and other minority ethnic groups continues in China’s Xinjiang region, the lawmakers claimed, calling for stronger action to hold Beijing accountable for the country’s crimes.

“By building upon current legislation, this bicameral bill aims to enhance the enforcement of secondary sanctions on businesses that offer assistance to the Chinese Communist Party’s ongoing atrocities against the Uyghurs,” Rubio said. UGASA would expand Chinese sanctions and travel restrictions on officials deemed responsible for the abuses, and would also grant the U.S. State Department and the U.S. Agency for International Development authority to intervene.

Under the law, U.S. companies would be allowed to help victims of genocide and forced labor broadcast initiatives, going against China’s propaganda, and assist in preserving the cultural and religious heritages suppressed by the Chinese government. UGASA would also mandate disclosures to the Securities and Exchange Commission of groups or individuals that support the Uyghur genocide, while funding organizations that document the human rights abuses. “As Beijing continues with its campaign of oppression against non-Chinese ethnic groups, we must uphold sanctions against Chinese authorities and companies responsible for acts of genocide,” Rubio added.

According to a 2020 China census, more than 11 million Uyghurs live in the Xinjiang region, which produces most of China’s cotton fiber. “Uyghurs and other ethnic groups in Xinjiang are being tortured, imprisoned, forced into labor, and pressured to abandon their religious and cultural practices by the Chinese government,” Merkley said.

The U.S. “must send a resounding and unequivocal message against genocide and slave labor wherever these evils appear,” he added. “The horrifying surveillance, imprisonment, torture, and forced ‘re-education camps’ that Uyghur Muslims have been subjected to are appalling human rights violations, depriving millions of people of their liberty in an effort to strip an entire community of their culture and their past.”

The bill represents a “critical step” in holding China’s government accountable, while also offering persecuted groups new protections, Merkley said. Companion legislation will be introduced in the House of Representatives by Rep. Chris Smith, a Republican out of New Jersey.

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