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Ways and Means Passes Legislation to Combat China’s Malign Influence and Protect American Workers

April 19, 2024

The Ways and Means Committee advanced six bills that take significant and historic steps to counter China’s unfair trade practices and protect American producers.  These policies will stymie China’s attempts to exploit American trade and tax programs to fuel its growing global influence, including legislation to reform the General System of Preferences (GSP) and end China’s abuse of the de minimis privilege.

Legislation passed by the Committee removes China and its unfair trade practices from U.S. supply chains. Those policies require the Biden Administration to block cobalt mined with forced labor in Chinese-owned mines in the Democratic Republic of Congo and close Biden Administration loopholes allowing Chinese billionaires and manufacturers to benefit from U.S. tax dollars in the Inflation Reduction Act. The Committee voted to end the Biden Administration’s unlawful attempt to circumvent Congress to provide more tax credits to foreign interests by claiming that a made-up “critical mineral agreement” counts as a free trade agreement – an action by the Administration that does nothing to reduce American dependence on China for critical minerals.

As part of Congress’s commitment to support America’s ally Israel, the Committee also passed legislation to protect Israel from targeting by the anti-semitic boycott, divestment, and sanctions (BDS) movement.

Click here to watch Chairman Smith’s opening statement.

In his opening statement, Ways and Means Committee Chairman Jason Smith (MO-08) noted that this package of legislation advances the goals of using U.S. trade policy to shift our supply chains out of adversarial nations, find new opportunities for American producers, and counter China:

The package of policies before us today implements common-sense reforms for the benefit of American consumers, workers, and farmers.

Many of these bills end the special treatment exploited by Chinese companies for their own gain and that of the Chinese Communist Party.

They recognize that forced labor has found its way into our supply chain, in violation of U.S. law.

They recognize that China has spent years and trillions of dollars to dominate developing markets that should be expanding markets for American exports.

They recognize that when we rely too much on one country for medicine, energy, and other key goods, we risk the health, safety, and security of American citizens and lose our economic independence.

The tools of trade do not need to be a one-way street into the United States. We need to use trade policies to secure a specific objective for America – in this case, standing up to China, opening up markets for our farmers, and improving the national and economic security of America.”

The Generalized System of Preferences (GSP) Reform Act

Introduced by Trade Subcommittee Chairman Adrian Smith (NE-03), H.R. 7986 is the most significant reform in the GSP program’s 50-year history.

  • Renews the program until December 31, 2030.
  • Permanently bans China from the program.
  • Sets new country eligibility for participation, like fair treatment for U.S. agricultural exports and removing countries with growing military and economic ties with China.
  • Incentivizes supply chain shifts out of China and toward trusted allies by increasing the competitive needs limitation from $215 million to $500 million.
  • Increases the GSP rule of origin (ROO) from 35 to 50 percent over time while incentivizing additional U.S. content in GSP products.
  • This bill includes multiple provisions championed by several members including:
    • Increasing the competitive need limitation. – Rep. Blake Moore (UT-01)
    • Analysis of potential changes in products eligible for GSP. – Rep. Carol Miller (WV-01)
    • Procedural improvements to provide transparency and hold the Executive Branch accountable to administer the GSP program as Congress intends. – Rep. Lloyd Smucker (PA-11)
    • Removing countries with growing military ties to China and other adversarial nations from the program. – Rep. Greg Steube (FL-17)
    • Requiring fair treatment of American digital goods and services. – Rep. Darin LaHood (IL-16)
    • Mandatory exclusion of China from GSP. – Rep. Neal Dunn (FL-02)

Click here to read the one-pager.

The End China’s De Minimis Abuse Act

Introduced by Rep. Greg Murphy (NC-03), H.R. 7979 dramatically curbs the flow of de minimis shipments from China into the U.S., closes a loophole China was using to escape section 301 Tarrifs put in place by President Trump, and future-proofs the law to prevent the use of de minimis to avoid U.S. trade enforcement actions.

  • De minimis shipments allow imports valued at less than $800 to enter the United States without paying any tariffs.
  • Over 60 percent of de minimis shipments entering the United States come from China.
  • The bill ends the de minimis privilege for any good subject to Section 301 tariffs – immediately eliminating the de minimis privilege for more than 60% of such entries from China. It also would do the following:
    • Prohibit use of the de minimis privilege for imports subject to other U.S. trade remedies, including national security tarrifs, and codifies an existing prohibition on the use of de minimis for imports subject to antidumping and countervailing duty tariffs.
    • Imposes a new civil penalty for any person who violates U.S. de minimis law of $5,000 for the first violation and $10,000 for each subsequent offense.

Click here to read the one-pager.

The Stop China’s Exploitation of Congolese Children and Adult Forced Labor through Cobalt Mining Act

Introduced by Rep. Chris Smith (NJ-04), H.R. 7981 requires an investigation into the use of child or forced labor in the Democratic Republic of the Congo (DRC) mining industry.

  • Despite a longstanding statutory prohibition on imports made, in whole or in part, with forced labor, and longstanding concerns about child and forced labor in DRC cobalt mines, U.S. Customs & Border Protection has never imposed a Withhold Release Order to block any imports of cobalt from the DRC.
  • This bill requires the interagency Forced Labor Enforcement Task Force to investigate the use of forced labor in the DRC’s cobalt mining industry and requires the Administration to block imports pursuant to section 307 of the Trade Act of 1974 of any cobalt found to be mined or processed with the use of forced labor.
  • Cobalt is an essential component of most lithium-ion batteries – components in smartphones, laptops, and electric vehicles.
  • Worldwide cobalt demand is expected to increase over 600 percent by 2040.
  • Chinese entities reportedly have ownership stakes in 15 of the DRC’s 19 cobalt mines.
  • An estimated 40,000 of the 255,000 miners in artisanal and small-scale mining in the DRC are children.

Click here to read the one-pager.

The Stop Executive Overreach on Trade Agreements Act

Introduced by Rep. Michelle Fischbach (MN-07), H.R. 7983 stops the Biden Administration’s attempt to redefine free trade agreements to get around its own Inflation Reduction Act.

  • The Inflation Reduction Act (IRA) signed by President Biden requires that critical minerals in electric vehicle (EV) batteries be sourced domestically or from a Free Trade Agreement (FTA) partner to receive half of the $7,500 tax credit.
  • “Free Trade Agreement” is a well-understood term that refers to comprehensive trade agreements approved by Congress.
  • The Biden administration is usurping Congress by pretending a “Critical Minerals Agreement” with Japan is an FTA that qualifies for IRA tax credits. The Administration is pursuing similar agreements with the United Kingdom and European Union.
  • These agreements do not open these foreign markets to more American-made products and U.S. agriculture.
  • This bill ends the use of Critical Mineral Agreements to satisfy the IRA’s domestic sourcing requirement and defines an FTA as one that (1) is approved by Congress and (2) eliminates restrictions on substantially all trade with the partner.

Click here to read the one-pager.

The End Chinese Dominance of Electric Vehicles in America Act

Introduced by Rep. Carol Miller (WV-01), H.R. 7980 closes Biden Administration loopholes giving American taxpayer dollars to Chinese billionaires and battery manufacturers.

  • Under the IRA, EVs are ineligible for a tax subsidy if they contain battery components or critical minerals sourced from a foreign entity of concern.
  • The Biden Treasury Department wrote lenient rules that allow Chinese billionaires with unofficial ties to the Chinese Communist Party and Chinese battery manufacturers to receive U.S. tax subsidies.
  • This bill closes both loopholes benefitting Chinese billionaires and Chinese manufacturers.
  • This legislation will help encourage more American mining, processing, and manufacturing of critical minerals and other EV battery components.

Click here to read the one-pager.

The Anti-BDS Labeling Act

Introduced by Rep. Claudia Tenney (NY-24), H.R. 5179 pushes back on the Boycott, Divestment, and Sanctions (BDS) movement intended to weaken Israel’s economy.

  • In December 2020, the State Department issued guidance that recognizes (1) Israel exercises political authority over parts of the West Bank and (2) Gaza and the West Bank are politically separate areas.
  • In response, U.S. Customs and Border Protection issued a notice stating that products made in Israel, the West Bank, and Gaza carry a label that reflect its origin.
  • This bill will give Americans better understanding of the origin of imports and ensure products made in areas of the West Bank controlled by Israel are acurately marked as “Israel,” “Product of Israel,” or “Made in Israel.”
  • This bill rejects the anti-Semitic Boycott, Divestment, and Sanctions (BDS) movement and any effort to isolate and damage Israel economically

Click here to read the one-pager.