Industry leaders want roadmap for China trade

Coalition of Services Industries President Christine Bliss was among those testifying at a Wednesday Senate Finance subcommittee hearing and asking the executive branch to provide direction to combat China’s unfair trade policies.    A clear roadmap for addressing unfair Chinese trade and investment policies is needed after the Trump administration last week released a list proposed duties across about 1,300 tariff lines worth approximately $50 billion in Chinese goods imports, Coalition of Services Industries President Christine Bliss told senators Wednesday.
   After an investigation led by the Office of the U.S. Trade Representative (USTR) under Section 301 of the Trade Act of 1974 found that China imposes unfair intellectual property and technology transfer policies against U.S. firms, the agency on April 3 released a formal notice proposing 25 percent tariffs against specific Chinese products.
   China has announced plans to retaliate with its own tariffs against U.S. exports and has requested World Trade Organization (WTO) consultations, the first step in the multilateral body’s dispute settlement process.
   USTR has clearly identified many objectives for U.S. efforts to counter unfair Chinese trade practices through the Section 301 investigation process, Bliss said during a hearing of the Senate Finance Subcommittee on International Trade, Customs and Global Competitiveness.
   “But I think in terms of pressing forward on what should be accomplished, there still needs to be a roadmap, and I think that’s what people are really waiting to see in terms of what are the specific objectives? What’s the timetable? What happens if those objectives are not reached? And I think a critical part of that…is working with our allies,” she said.
   Information Technology Industry Council CEO Dean Garfield said during the hearing that China probably doesn’t want a trade war despite its retaliation threats, but Chinese President Xi Jinping will continue fighting aggressively to protect power he and his government have consolidated over the past six to eight years.
   The United States should work to help Chinese companies and individuals voice their concerns to Xi’s administration, Garfield said.
   “One of the things I’ve learned over the years in visiting China is that there are Chinese companies and individuals within the Chinese government who have significant concern about the trade norms in China,” he said. “So part of the work is actually empowering those companies and those potential allies within China to begin to stand up on the need for China to go along with global norms.”
   Subcommittee Chairman John Cornyn, R-Texas, noted that while several witnesses said the United States should play the “long game” in terms of addressing trade issues with China, he’s also concerned with the nearer term, “which may affect the long game.”
   “If China is able to [steal] intellectual property, undermining our industrial base by strategic investment in the United States, including startup companies that may not even be on our radar screen, I just wonder how much time we have before they basically beat us in the near-term game so that, long term, they own a dominant economy and while they continue to build their military power,” Cornyn said.
   Many have believed that China started an ongoing trade war several years ago, Thea Lee, president of the liberal Economic Policy Institute, said during the hearing; it just hasn’t been officially recognized.
   Cornyn said, “I’m not sure we’ve been fighting back.”
   One of the ways to engage with China to improve its trade and investment policies could be for Congress to lay out some prospective terms of economic engagement for the executive branch, Garfield said.
   Senior Trump administration officials also should consider an immediate visit to China to engage with Xi and top members of his government, Garfield said, because Xi at least signaled during a speech Tuesday his intention for China to adopt more market-opening incentives, including lower automobile tariffs, greater IP protection for investors and faster progress toward ratification of the WTO Government Procurement Agreement.
   Congress could help encourage, for example, Treasury Secretary Steven Mnuchin to “get on a plane and advance these negotiations in the immediate term so we can take advantage of what President Xi is saying,” Garfield said. “I think that would be quite helpful.”