Next Major Bill May Focus on Curbing China
Author: Greg Valliere
March 11, 2021
YOU WANT A TRULY BIPARTISAN BILL? Then focus on China, which is “eating America’s lunch,” Joe Biden famously declared last year. There’s growing support in Congress for legislation that would challenge China’s economic clout.
WE’VE TALKED WITH AIDES IN BOTH PARTIES in recent days, most of whom have little stomach to plunge immediately into a bitter debate over a green infrastructure bill or a major tax increase. When they look for common ground, one theme dominates: Washington’s antipathy toward Beijing.
THE PLAYER TO WATCH is Chuck Schumer, a persistent China critic, who suddenly is the most powerful person in Congress. Schumer wants to move legislation, soon, that would focus on boosting U.S. manufacturing and supply chains.
A CATALYST, WHICH WE HEAR CONSTANTLY, is that U.S. companies — especially in the auto industry — face a dire shortage of semiconductor chips. Demand far exceeds supply, shipping lanes are clogged, and a skilled labor shortage persists in the U.S. Schumer’s bill would address that.
KEY MEMBERS IN CONGRESS are preparing to move legislation from Schumer and Sen. Todd Young (R-Ind.) later this spring, The Washington Post and others are reporting that they’re ready to move soon. (A massive infrastructure bill and a tax hike are not ready to move, we’re hearing.)
SCHUMER WANTS TO SPEND MONEY, OF COURSE: He supports legislation that would fund 5G networks, expand U.S. ports, and support U.S. production of more semiconductors. There’s no price tag yet for his plan, but it’s likely to soar into the tens of billions — small change compared to the Covid relief bill.
SCHUMER AND GOP SEN. YOUNG have already proposed a bill that would seek to counter China’s relentless drive to gain superiority. It’s an understatement that the Chinese government is viewed as a villain in Washington — because of its treatment of dissidents, its lack of transparency on Covid, and its recent hacking of U.S. firms.
THE MORE IMMEDIATE CONCERN is U.S. reliance on Chinese-produced health goods, ranging from face masks to crucial medical supplies. The Trump Administration imposed tariffs — which probably will persist — but there’s a growing mood in Congress that the U.S. response should be shoring up American competitiveness; there’s a strong desire to compete with Huawei in the G5 ramp-up.
BOTTOM LINE: Biden knows he can win bipartisan support for legislation that would seek to curb China by ramping up U.S. production. Since money is no object any more, he can allocate billions to U.S. firms; this would be a popular move even among Trump supporters, who have a populist dislike of the Chinese government.
WHETHER BIDEN WILL MENTION THIS in tonight’s address is unclear. He will proclaim that Covid is retreating, and he will sell his Covid relief bill (which already is very popular). But Biden knows that much more needs to be done, so why not go for an easy win against China before moving on to green infrastructure and tax hikes?
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