US House of Representatives panels consider how to counter China’s security threats and “unfair” trade practices

“Let’s say there were a million Chinese cars on the road, all connected, all collecting data from Americans — all of that goes back to Beijing,” she told the Subcommittee on Innovation, Data and Commerce.

“That’s why we’re very aggressive,” Raimondo said.

She said the policies the department is working on could include “everything from banning Chinese electric vehicles on American roads to regulating their software – perhaps all data will have to be stored in America.”

Raimondo added that her concerns revolve around “the national security issue of all this data going back to the Chinese military.”

She also said the department is analyzing public comments about the security risks of connected vehicles to understand the cars’ ability to communicate with external systems, which potentially includes data interception or the ability to remotely disable or manipulate other vehicles.

Raimondo said the department’s budget provides funds to strengthen U.S. relationships with allies to “shape the strategic environment in which we operate toward China.”

At another hearing, this time before the House Select Committee on China, lawmakers heard proposals from U.S. experts on how to address China’s dominance in semiconductors, shipbuilding and drones.

Rep. Raja Krishnamoorthi of Illinois, the senior Democrat on the committee, argued that failure to address such challenges could “invite aggression.”

Krishnamoorthi argued for restoring the mechanism to protect against import surges, established in 2001 when Beijing joined the World Trade Organization.

“It’s time to revive and modernize section 421,” he said. The provision is intended to allow the United States to impose short-term tariffs to ease market disruption caused by a surge in imports from China’s low-cost manufacturing sector. The section expired in 2013.

Krishnamoorthi accused China of denying U.S. companies access to its market while flooding the U.S. with heavily subsidized goods.

He noted that DJI, a Chinese drone maker that is a global industry leader, accounted for 90 percent of the U.S. consumer market, while Skydio, a manufacturer based in San Mateo, California, had to exit the U.S. market last year due to lower prices DJI.

The Skydio drone sold for $1,000 was on par with a comparable DJI drone costing $300, Khrishnamoorti said, maintaining that DJI is subsidized by the Chinese government.

The select committee and its witnesses seemed to agree that the Chinese Communist Party intended to control technologies and sectors that would determine future conflicts; They also said that China has about 235 times the shipbuilding capacity of the United States and that it is investing heavily in older generation semiconductors.

In April, the U.S. Trade Representative launched an investigation into China’s maritime, shipbuilding and logistics sectors for “unfair and non-market practices.”

Docking fees of about $1 million per freighter, Khanna said, “would be less than $50 per container, which would mean Americans would have to pay a few cents more for their jeans or shirts so we could have American products on ships again.”

Khanna criticized the U.S. Chamber of Commerce, a leading business lobby, for opposing the move.

“They testified, ‘No, we can’t pay a few cents more’… It’s a philosophy that bankrupted and deindustrialized America in order to obtain cheap labor at low prices,” Khanna said.

“We kept sending our industry overseas to China, and we still do.”

12:53

‘Overtaking at the Turn’: How China’s Electric Vehicle Industry Is Rushing to Dominate the Global Market

‘Overtaking on the curve’: How China’s electric vehicle industry is charging forward to dominate the global market

Rep. Andy Barr, a Republican from Kentucky, said he supported the port fee “because I think China is a unique case,” but acknowledged it was actually a “protectionist policy” that “could morph into something beyond China.”

“I don’t think we should try to counter China by imitating China’s industrial policies,” Barr said.

Christopher Miller, author of, among others, Chip War: The fight for the world’s most critical technologytold the committee that while U.S. President Joe Biden’s administration has put some protective measures in place, “there is still much work to be done,” especially when it comes to semiconductors used in both drones and ships.

Miller, a professor at Tufts University’s Fletcher School of Law and Diplomacy, said Beijing has poured billions of dollars in subsidies in recent years on lower-tech “basic chips” used in everything from cars to laptops.

“If current trends are projected, China is poised to see a dramatic increase in its share of the core chip market,” he said.

“Some of these chips will be sold to Chinese markets, but many of them will be sold to Western markets unless policy changes,” he said, calling for new restrictions on outbound investment for low-end chips.

Biden issued an executive order last year that limits outbound U.S. investment in advanced technologies such as high-tech chips, artificial intelligence and quantum technologies.

“Investment flows into China’s chip industry have declined significantly, and new restrictions on outbound investment will further restrict any investment in Chinese chips,” Miller said.