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Opinion: Confronting Made in China is crucial to America's leadership

April 1, 2021

The United States faces a strategic adversary in the Chinese Communist Party (CCP) that is challenging our political, economic, industrial, and educational systems. In response, Congress and the administration have taken steps toward adopting Made in America policies to reduce U.S. dependence on Chinese manufacturing and rebuild our competitive edge. We must ensure that these policies discourage the CCP from engaging in corrupt business practices while protecting American jobs and economic growth.

On Feb. 24, President Biden built on former President Trump’s Made in America efforts by issuing an executive order on America’s Supply Chains to safeguard American manufacturing and defend our industrial base. The executive order calls for a 100-day review of the origins of four vital products: semiconductors; minerals and materials like rare earths; pharmaceuticals and their ingredients; and advanced batteries. Rebuilding manufacturing abilities and creating competition in these areas is critical to remaining a world leader and providing real solutions to our global partners.

Along with a review of these products, we urge the administration to study the illicit Chinese energy chain and its impact on China’s manufacturing advantages.

China’s access to a black market of cheap, sanctioned oil and gas helps the country produce steel, plastic, chemicals, and pharmaceuticals at lower price than many of its global competitors. With Malaysia as a key hub, China has been operating an oil racket, subsidizing its industrial and economic base by securing volumes of sanctioned oil from Iran and Venezuela. In January, Indonesia seized two supertankers transferring sanctioned oil to China, and the so-called Malaysia Shuffle — where oil from Tehran and Caracas is transferred or mixed with additives en route to China — is a well-known game. By buying prohibited oil, China fuels Iranian aggression in the Middle East. Both the resulting instability in that region and the subsidized Chinese goods made with sanctioned energy exact a real cost on the United States and our partners. 

The CCP expertly subverts the international rules-based order, and President Biden should work with our partners and allies to shine a light on these trade practices and consider the downstream effects of sanctions evasion on Chinese competitiveness. The Trump administration took some steps to hold these Chinese companies accountable in October, but a Biden official dimmed the prospects of additional sanctions, reportedly saying in mid-March that “[F]ar better than us focusing on sanctions enforcement and China focusing on sanction evasion would be to get on a more productive course, which is for the US to lift sanctions and Iran to reverse its nuclear steps.” We urge the administration to enforce the penalties for this illicit trade regardless of its pursuit of talks with Iran.

Another area that the administration should push is the establishment of a competitive alternative to Huawei’s 5G monopoly. The Trump White House led an effort with U.S. telecom and technology companies to create common engineering standards to reduce dependence on Chinese hardware and ensure that our 5G infrastructure is primarily constructed by American companies. Pushing these market solutions dilutes the national security and economic risks posed by Huawei’s equipment and maintains the U.S. advantage in the technology space. President Biden has the political capital on a world stage to continue the work of promoting safe and secure 5G adoption and undermining widespread adoption of problematic Chinese technologies.

These are just a few pieces of a longer conversation around reshoring critical capabilities and maintaining our technological edge. Surrendering critical manufacturing capabilities and losing our position as the world’s No. 1 innovator would erode our ability to hold the CCP accountable and defend our free system. Our partners in the Indo-Pacific and across the world are willing to join forces. The stakes are high, but the solutions are in front of us, and we look forward to working with the Biden administration to build on our competitive advantages.