U.S. Trade Representative Dyche: New “legal tools” to fight China’s future threats

U.S. Trade Representative David Deitch said on Thursday (13) that the United States faces anti-competitive threats from China’s high-tech industries, so new “trade law tools” are needed to stop them, and she criticized the current legal regime for reacting only after injuries have occurred, which is too reactive.

Reuters reported that Dykes testified at a hearing of the U.S. House of Representatives Fundraising Committee that the existing “trade law tools” are remedial only after U.S. industries and companies have been harmed by illegal price dumping, subsidies or other unfair competition.

I really want to strengthen the trade tools that we have to address the problems that we have today,” Dyche said. She noted that many U.S. trade regulations are nearly 50 or 60 years old.

U.S. trade laws, by their retroactive nature, have been unable to prevent damage to the U.S. steel industry because China has built up significant production capacity over the past 20 years, Dyche said, adding that China’s five-year plan shows it is prepared to do the same in other industries.

Dyche noted, “I think we need tools not just to react to the abuses we’ve suffered in the past, but tools to anticipate where we’re going to see the same pattern of compromised interests so that we can prevent problems before they arise and so that we can respond as quickly as possible.”

Dyche had called Wednesday for Congress to update Section 232 (the national security trade statute) of 1962, which authorizes the government to impose tariffs on steel and aluminum imports.

In her speech Thursday, she detailed her desire for regulations to address China’s massive subsidies and to respond to China’s state-dominated economic system. If enacted, the new law could lay the groundwork for new tariffs in the future to protect more U.S. industries or could be used as a bargaining chip in negotiations.

Beijing’s “Made in China 2025” plan targets 10 strategic industries currently dominated by the United States, including aerospace, semiconductors and information technology, robotics, green energy and electric vehicles, agricultural machinery, pharmaceuticals, and advanced materials.

The Biden administration is conducting a “comprehensive review” of its trade policy with China, including how it views the “first phase” of trade agreements reached between former President Trump and Beijing, which will expire at the end of 2021.

Dykes revealed that the U.S. has exempted many Chinese imports from Section 301 tariffs, but these exemptions have expired for many years, and the U.S. government’s review will include these issues and provide a timely response.

Dyche reiterated the Biden administration’s tough stance on trade and human rights abuses by China.

We welcome fair competition,” she said. But if China is unable or unwilling to adapt to international rules and norms, we must create a level playing field.”