Yesterday, the House Select Committee on the Chinese Communist Party held a hearing entitled, “Combatting the PRC’s Strategy to Dominate Semiconductors, Shipbuilding and Drones.”

The Committee discussed several potential policies governing trade with China:

1. Additional tariffs tied to China meeting World Trade Organization (WTO) commitments;
2. Fees on Chinese ships using U.S. ports;
3. Using these fees and other revenues to create new subsidy programs to promote domestic shipbuilding as well as the domestic drone and semiconductor industries; and
4. Delisting Chinese firms from U.S. exchanges.

Most of these policy proposals are not new but highlighting them during a committee hearing bolsters their chances of coming to fruition.

Ranking Member Raja Krishnamoorthi (D-IL) argues for resurrecting a provision of U.S. law passed when China acceded to the World Trade Organization (WTO) which imposed higher tariffs and import quotas on countries which had not fully implemented its WTO commitments. The provision expired over a decade ago.

Rep. Blaine Luetkemeyer (R-MO), who is also a senior member of the House Financial Services Committee, suggests delisting Chinese firms from U.S. exchanges so that domestic capital does not finance growth by China in critical sectors.

According to Committee Chairman John Moolenaar (R-MI), China’s “go-to strategy” is “Building government-subsidized monopolies that sell into a protected domestic market, produce products at below-market prices, exponentially scale their production capacity and then dump that overcapacity on global markets to taint capacity and drive competitors out of the market…that playbook has now been exposed and it’s up to us in Congress to counter it.”

The Select China Committee does not pass legislation in its own right, but its legislative recommendations are often taken up by other House committees and several have become law.

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