House Select Committee Advocates Trade Changes with China

Dec. 19, 2023
By: Marvin E. McPherson

A bipartisan report released by the House Select Committee on the Chinese Communist Party (“House Select Committee”) has recommended a series of measures to reset America’s economic relationship with China. The report accuses China of engaging in a “multidecade campaign of economic aggression” that has harmed and left the United States vulnerable. The extensive report includes nearly 150 recommendations to address these vulnerabilities, such as revoking the low tariff rates granted to China after it joined the World Trade Organization, imposing new tariffs on older types of Chinese chips, restricting the flow of capital investments, and expanding technology controls between the two countries.

While many of the recommendations may face challenges in being adopted by Congress, the report is a recognition of a potential path toward bipartisan legislation on China in the future. The reports first and arguably most significant recommendation is to phase in a new set of tariffs for China over a short period of time.

In addition to tariffs, the report recommends increasing the authority of the Committee on Foreign Investment in the United States (CFIUS) that reviews foreign investments for national security threats. The House Committee views certain investments not within the scope of the CFIUS’ current review as a threat to U.S national security.

Additionally, the report recommends increased restrictions of sensitive “technology” as defined by the Export Administration Regulations (EAR) going to China or any company ultimately headquartered in China.

The report’s release comes amid ongoing trade tensions between the United States and China, with both countries having imposed tariffs on each other’s goods in recent years. Additionally, the U.S has tightened export control restrictions for companies with an ultimate headquarters in China. The report’s recommendations reflect a broader push to reassess and potentially restructure the economic relationship between the two countries.

We will continue to monitor the ongoing proceedings of the House Select Committee to see if any movement stems from these recommendations. Companies should remain current with all Chinese related compliance measures. If you have any questions surrounding current Chinese tariffs or export control restriction to or within China, please contact any attorney at Barnes Richardson and Colburn.