As the United States confronts China on trade, Congress can’t leave American workers behind
Since China’s ascension to the World Trade Organization in 2001, a move that I supported, the U.S. has struggled to compete with China. American workers have suffered an unprecedented outsourcing of their labor given China’s track record of brazen and unfair market manipulation, substandard labor standards, and weak environmental protections, leaving the United States overly reliant on imports from China. As the COVID-19 pandemic made clear, this overreliance has life and death consequences.
A core tenant of our global trading relationship is that countries agree to compete on equal footing, allowing each country’s comparative advantage to win out. The U.S.-China trading relationship fails this test. American companies must compete on price with religious persecution and forced labor in Xinjiang, state subsidies, low environmental standards, and no intellectual property protections, giving Chinese firms a distinct advantage. It’s clear that American commerce gets the short end of the stick.
This imbalance has left American workers behind. Chinese market distortion puts downward pressure on U.S. wages, labor protections, employment, and ultimately production capacity. Not only does this accelerate the hollowing out of the American middle class but it also reduces our manufacturing capacity and makes critical supply chains overly dependent on foreign nations.
Enter the House’s America Creating Opportunities for Manufacturing, Pre-Eminence in Technology, and Economic Strength (COMPETES) Act and the Senate’s U.S. Innovation and Competition Act (USICA), pieces of legislation that are opportunities to confront China head on and reframe the U.S.-China trading relationship.
Included in the House’s America COMPETES Act is a trade title authored by my Ways and Means Trade Subcommittee that gets tough on China and doesn’t leave American workers behind. While the rhetoric on Capitol Hill in the last several years has boiled down to who can be tougher on China, the policies advanced have done nothing to rebalance the U.S.-China trading relationship. The America COMPETES Act reverses this trend.
American workers who lost their jobs due to trade can breathe a sigh of relief with the expansion and reauthorization of Trade Adjustment Assistance (TAA). Congressional dithering allowed for the TAA program to be cut in half last year and without action the program will expire entirely in just three months. This may be Congress’ last and best chance to support these workers and help them find a good-paying job before the program expires; we can’t pass it up.
The America COMPETES Act also critically excludes finished products in reauthorizing temporary reductions in tariffs on imports. In recent years finished products have accounted for nearly half of these temporary tariff reductions, more than half of which come from China. Rather than reducing tariffs on finished products like microwaves, appliances, and catamarans, undercutting American manufacturing workers, shouldn’t U.S. trade policy support American manufacturers and their workers?
The COMPETES Act also includes my legislation to close the de minimis loophole, a loophole so big you could fly a cargo plane through. What started as a modest provision intended to reduce administrative burdens, de minimis shipments have grown into big business — more than two million packages enter the United States every day without oversight and without paying duties, taxes, or fees. American manufacturers and their workers can’t compete with de minimis products from China that we know run afoul of consumer product safety standards, benefit from state subsidization, and may be produced with forced labor. Companies like Shein are exploiting de minimis to cannibalize American retailers and the millions of people they employ. By eliminating de minimis treatment for products from China, American workers can compete on a level playing field.
As the House and Senate kick off the conference committee in the coming days, the American public will be watching closely: will the trade title meet the rhetoric of getting tough on China and supporting American workers, like the America COMPETES Act, or will it sell out American workers? I’ll be working with fellow conferees to ensure we get the best possible outcome that rebalances the U.S.-China trade relationship and helps American workers.
Earl Blumenauer is chairman of the Ways and Means Trade Subcommittee.
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