Washington Update

The US International Trade Commission (USITC) released a congressionally-mandated report on the efficacy of Section 232 and 301 tariffs. It concluded that despite claims from the Trump administration, it is US importers, not Chinese, who have paid nearly the full cost of the tariffs.

On Wednesday, Chair of the Senate Intelligence Committee Mark Warner (D-VA) and Republican Senate Whip John Thune (R-SD) introduced the Restricting the Emergence of Security Threats that Risk Information and Communications Technology (RESTRICT) Act, which would pave the way for TikTok to be banned in the United States.

During primetime on Tuesday, the Select Committee on the Strategic Competition between the United States and the CCP held its first hearing, “The Chinese Communist Party’s Threat to America.” Two former US national security advisors, a human rights advocate, and a leader in the US manufacturing sector testified.

Earlier this week, Select Committee on the CPP Chair Mike Gallagher (R-WI) returned from a surprise visit to Taiwan. In a Wall Street Journal op-ed published upon his return, he noted that nearly all of the Taiwan officials he met with saw the Russian invasion of Ukraine as a wake-up call, and he argued that it must be a priority for the United States to clear the nearly $20 billion backlog of arms sales to Taiwan.

Last Friday, the Biden administration added six Chinese entities to the Entity List due to their connections to China’s surveillance balloon program. Yesterday, China responded by adding the defense and missile subsidiaries of two US companies to its Unreliable Entity List (UEL), the first time China has actually used the tool since it was created in 2020.

On Tuesday evening, President Joe Biden in his second State of the Union address explained how his administration has strengthened its investments in US innovation, critical technologies, and strategic alliances in order to compete with China and defend US interests. Additionally, Biden announced plans to require all construction materials—such as lumber, glass, drywall, and fiber optic cables—used in federal infrastructure projects to be made in America.

The Netherlands and Japan have reportedly reached an agreement with the United States to join its efforts to restrict sales of advanced semiconductor manufacturing equipment to Chinese entities. The Netherlands will reportedly restrict ASML Holding NV from selling deep ultraviolet lithography machines to China, and Japan is expected to impose similar restrictions on Nikon Corporation and Tokyo Electron.

Details about the House Select Committee on the Strategic Competition between the United States and the Chinese Communist Party are continuing to come out this week, with Chair Mike Gallagher (R-WI) loosely outlining a prospective agenda and Speaker of the House Kevin McCarthy (R-CA) appointing the committee’s Republican members.

On Wednesday, US Treasury Secretary Janet Yellen met with Chinese Vice Premier Liu He in Zurich in their first face-to-face meeting since Yellen took office. Both readouts and separate remarks struck a markedly positive tone, emphasizing deeper communication, responsibly managing the relationship, and working together on shared challenges like climate change.

On Tuesday, the House formally established the Select Committee on the Strategic Competition Between the United States and the Chinese Communist Party in one of the first votes of the new Congress. The majority of Democrats joined the entire Republican House caucus in voting for the measure. During floor debate for the resolution, newly elected Speaker of the House Kevin McCarthy (R-CA) promised the committee would take an approach that focuses on shared bipartisan challenges related to China.