Circular Firing Squad?

By: Lori Wallach, Rethink Trade Director

House COMPETES Act Trade Terms Benefit U.S. Workers and Competitiveness, Those in Senate USICA Would Make U.S. More Reliant on China

In March, I warned the “biggest trade vote you’ve never heard about” was coming. Well, this week the House and Senate are supposed to start reconciling wildly different versions of that China legislation. And the stakes are high.

The simplest way to think about this may be via Dr. Doolittle’s mythical beast, the PushMePullYou. The core body — perhaps 75% of both bills — are almost the same. Money for domestic microchip manufacturing, improvements in advanced research and various programs to improve U.S. competitiveness vis-a-vis China. And then at the last minute, the Senate decided to attach an additional part — a trade title.

The “China” bills resemble Dr. Doolittle’s PushMePullYou thanks to the addition of a House trade title that heads the country forward and a backwards Senate trade title attached to the body of bills that are otherwise quite similar.

That Senate add-on doubles down on the corporate-rigged trade model that made us extremely reliant on Chinese imports and left us unable to make or get critical goods during the COVID-19 crisis. Yes, the Senate bill to make the United States less reliant on China expands on the policies that encouraged 70,000 U.S. manufacturing facilities to shut down and fire millions of U.S. manufacturing workers since Congress voted for China to join the WTO in 2000 and imports from China increased enormously.

Plus, the Senate version has an alarming giveaway for Big Tech that would require U.S. government officials to annually go on a search and destroy mission against other countries’ best policies that stop the mega-platforms’ abuses. Yup, your tax dollars would fund U.S. government attacks against the world’s best gig worker and consumer privacy protections and anti-monopoly initiatives through a process called “Special 301” for Big Tech.

In response, some months later the House attached its own trade title when it took up its version of China legislation. Except the House version heads in exactly the opposite direction on trade. It shuts down the existing “Amazon loophole” that allows millions of packages bought online to enter the U.S. daily from China without safety inspections. Goods produced with banned Uighur forced labor are flooding in via this “de minimis” scam. Firms also use it to dodge taxes and trade enforcement. The House’s trade title improves U.S. laws that counter trade cheating, ends various corporate trade abuses and strengthens supply chain resilience in several key ways. It raises labor and environmental standards and provides funds to retrain workers and help communities slammed by decades of race-to-the-bottom trade policies.

The House version is good policy and smart politics. The Senate version would be ruinous on both fronts. David Dayen has a great take in last week’s excellent American Prospect piece, The Trade Fight That Could Doom Biden’s Industrial Policy.

I described the differences in the House and Senate versions in some detail in a piece the title of which says it all: “China” Bills Trade War: House COMPETES Act Boosts U.S. Workers, Producers and Resilience; Senate USICA Would Make Things Worse. I promised if readers wanted a side-by-side comparison, I would create one. So, voila. And I inserted the citations so you can read the bill text, because some of the dangerous stuff in the Senate bill is hard to believe unless you see it for yourself.

“China” Bills Side by Side: House COMPETES Act versus Senate USICA

The America Creating Opportunities for Manufacturing, Pre-Eminence in Technology, and Economic Strength (COMPETES ) Act of 2022 trade title would improve U.S. economic resilience and promote the worker-centered trade policy that the Biden administration is pursuing.

Trade provisions added to the U.S. Innovation and Competition Act of 2021 (USICAshortly before it passed would undermine U.S. manufacturing capacity and supply chain reliability in key sectors and weaken our competitiveness, including to the direct benefit of Chinese economic interests.