US Needs to Reduce Reliance on Trade With China, Lawmakers Say
The U.S. needs to better prepare for future Chinese retaliation against U.S. trade restrictions, said Rep. Mikie Sherrill, D-N.J., which could further hurt U.S. imports of items needed for semiconductor production. Sherrill, speaking during a July 20 House Select Committee on China hearing, pointed to China’s recent export restrictions on germanium and gallium -- two metals used to produce semiconductors -- and said she expects more retaliation to come (see 2307060053 and 2307050018). “I think we're going to see more and more instances of China putting our supply chain at risk,” she said.
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Thea Kendler, an official with the Commerce Department’s Bureau of Industry and Security, said during the hearing that China has provided “no clarification” for the national security rationale it relied on to impose the controls, adding that the U.S. is “working very closely with allies and partners on these issues.” But she also said it’s “difficult to predict retaliatory action given the arbitrary nature of China's controls.”
Rep. Michelle Steel, R-Calif., urged the administration to invest more in domestic critical mineral mining, including in California, to reduce reliance on critical mineral imports from China. Daniel Kritenbrink, the State Department’s assistant secretary for East Asian and Pacific affairs, said “we absolutely believe that it is not in our interest or in the world's interest to be overly dependent on any one country” for critical minerals. “We are absolutely focused on that and are working on it aggressively with our partners around the world.”
Other lawmakers on the committee also called on the administration to reduce trade with China, including Rep. Carlos Gimenez, R-Fla., who said “just about everything we do with the Chinese undermines our national security.” Rep. Ro Khanna, D-Calif., noted the U.S. has “had massive trade deficits with China” since it joined the World Trade Organization, which he called a “colossal mistake.” He said the administration should do more to reduce its reliance on foreign “critical industries.”
The U.S. should also look to increase trade with Taiwan, Steel said. While she’s “happy” with the trade initiative reached earlier this year between the two sides (see 2305190074 and 2307190042) she said the deal is “very tiny” and should be expanded. She called on the administration to include Taiwan in its Indo-Pacific Economic Framework.
Kritenbrink suggested the administration has no plans to include Taiwan in IPEF. “We're very committed to building our partnership with Taiwan,” he said, but “the way that IPEF is currently configured, it has 14 partners. That's where we're focused.”