Hill China Bashing at Fever Pitch


Capitol Hill was alive with the sound of smashing China this week.  The Congressional Executive Commission on China held an update on repression in the Uyghur region, and members of the House Committee on Ways and Means shifted their focus from Tax Day to the Red Menace.

Not to be left behind, the House Select Committee on the CCP, led by Wisconsin Rep. Mick Gallagher wargamed the invasion of Taiwan.

Trade Promotion Authority Sought

Ways and Means Committee members are eying various legislative proposals to crack down on China’s predatory trade practices – an effort they expect will be bipartisan. Members from both sides of the political aisle raised the need for a legislative response to China at a Ways and Means Trade Subcommittee hearing on China Tuesday.

“Across the board, China seeks to dominate global trade and supply chains. They are using all tools at their disposal to advance their ‘Made in China 2025' initiative, subcommittee chairman Adrian Smith (R-Neb) said at the outset of the hearing.

“Today, we will hear why the United States must lead from a position of strength,” he continued. “We can do this by addressing the CCP’s practices directly while simultaneously using trade programs, agreements, and other tools to show we are a reliable and attractive alternative for nations around the world.”

Lawmakers should craft a Trade Promotion Authority bill “to put Congress in the driver’s seat,” reauthorize critical trade programs aimed at increasing US competitiveness and continue efforts to impose consequences for China’s trade practices, he said.

 Full committee chairman Jason Smith (R-Mo) agreed that the committee should develop a bipartisan bill “to use our authority over trade, and to use our leverage as a nation to strengthen critical supply chains and reduce dependence on adversarial nations like China and Russia.”

Smith criticized the Administration for excluding Congress from trade policy, saying it “only emboldens China and ignores the voices of the American people. Frameworks and dialogues are no substitute for congressionally binding action on trade.”  

Trade subcommittee ranking Democrat Earl Blumenauer (Ore) said he is ready to work across the aisle on China-related legislation. Closing the loophole of the US de minimis rule, which is being exploited by China to evade oversight and avoid duties, is one step Congress should take, he said.

“Because of this loophole, there is no way to tell how many of the more than two million packages per day contain products made through forced labor, intellectual property theft or are otherwise dangerous,” he stated.  

The de minimis loophole can allow evasion of the Uyghur Forced Labor Prevention Act, Mr. Blumenauer said. “This subcommittee must send a clear message to China that the United States will unequivocally protect worker and human rights.”

De minimus rules permit vendors to send materials without paying customs duties or reporting basic data if the value is under $800. CBP is conducting a voluntary test of a de minimis commercial entry process through the creation of the new Entry Type 86, which provides additional information to CBP that can be useful for enforcement purposes.

 Mr. Blumenauer has led past efforts to close the loophole, facing stiff resistance from Amazon and the package delivery industry.

China Commission Hearing

The de minimis exemption also came up at a hearing yesterday by the Congressional-Executive Commission on China focusing on implementation of the UFLPA. The commission issued a brief last week that raised concerns about Customs and Border Protection’s implementation of the law.

Commission member Rep. Jim McGovern (D-Mass) suggested that Congress may need to make some tweaks to the UFLPA as implementation progresses and issue emerge.

The Commission hearing opened with Rep Christopher Smith calling on CBP to redouble its efforts to prevent slave labor-produced goods from entering the U.S, saying

"We have questions as to why the robust Entity List of bad actors that UFLPA requires remains so spartan."

Mr. Smith cited reports that work gloves sold under the Milwaukee Tool label in venues such as Home Depot are produced by prison labor, and the role of Thermo Fisher Scientific in genetic data collection for forced organ harvesting.

 China has been accused of using incarcerated prisoners of conscience as an organ donor pool, executing them and harvesting their organs against their will. China's transplant program expanded rapidly in the early 2000s without a corresponding increase in voluntary organ donors, raising questions about the source of the organs.

 Testimony from Anasuya Syam, Human Rights and Trade Policy Director, The Human Trafficking Legal Center acknowleged the progress to date, noting

"While we still have a long way to go to achieve FCPA anti-bribery levels of compliance, forced labor is now getting more traction from senior management, as well as from investors.

"The message from the top is clear - forced labor is a “top tier” compliance issue. It is no longer the provenance of weak Codes of Conduct or Corporate Social Responsibility (CSR) measures."

A familiar face to followers of the topic,  Dr. Laura Murphy, a human rights expert at Sheffield Hallam University, testified before the Comission. Murphy noted that since the UFLPA's implementation, there has been swift enforcement and targeted funding allocations.

However, she highlighted that many U.S. corporations lobbied against the law and its enforcement, with some companies still avoiding scrutiny by shifting the burden of due diligence onto their suppliers.

Murphy described how companies in China have been using various tactics to evade regulations, such as changing subsidiaries' names, shipping products through other countries, and bifurcating their supply chains. She called for the U.S. government to prioritize expanding the entity list and urged Congress to presume that all state-sponsored labor transfers in the Uyghur region constitute forced labor.

Dr. Murphy stressed that the UFLPA is a human rights policy, not a measure to advance geopolitical or economic interests, and urged the U.S. government to encourage allies to align their laws to prohibit the import of forced labor-made goods. 

Solar Panel Spat Continues

 Ways and Means also held a markup of H.J.Res 39, Disapproving the Solar Panel AD/CVD waiver by the Department of Commerce “Procedures Covering Suspension of Liquidation, Duties and Estimated Duties in Accord With Presidential Proclamation 10414.”   The measure was favorably reported to the House of Representatives by a roll call vote margin of 2:1.  The rule is not expected to survive a presidential veto.

The full Committee on Ways and Means also held a hearing  Wednesday on the U.S. Tax Code Subsidizing Green Corporate Handouts and the Chinese Communist Party, affording members and their invited guests an opportunity to air greivances.

 Gallagher Committee Tabletops War

Chairman Mike Gallagher (R-WI) and the House Select Committee on the CCP, not to be outdone, spent Wednesday evening wargaming a Taiwan Invasion at the Center for a New American Security, a Washington think tank.  Mr. Gallagher, a former marine with a PhD in International Relations from Georgetown, has been a leading voice for military preparedness for a Chinese invasion of Taiwan.


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