House Democrats’ China Bill Would Make the U.S Less Competitive and Harm Consumers

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The House of Representatives is considering the America COMPETES Act this week, a bill described by sponsors as a “China competition bill.” The wide-ranging legislation includes provisions on issues ranging from trade to energy to labor policy and the Republican Study Committee released a memo calling the bill the “America Concedes Act.” CEI experts weighed in on the merits of the legislation.

Vice President for Strategy Iain Murray said:

“The entire premise of the America COMPETES Act is flawed. China’s retreat into Maoism under Xi suggests that the best way the United States can out-compete China is to allow markets to operate freely. We shouldn’t be trying to copy an industrial policy doomed to fail. And we certainly shouldn’t be loading it up with a wish-list of economy-crippling progressive demands. Free enterprise is the way America competes.”

Vice President for Policy Wayne Crews said:

“It is not sufficient to merely stop this bill. Rather than passing legislation like America COMPETES, the already enacted bipartisan infrastructure bill, or President Biden’s human infrastructure Leviathan, Congress should focus intently on legislation preventing the passage of these very kind of bills, and putting to an end the political predation that they embody. In today’s climate, lawmakers are using fear of the pandemic to continue a harmful approach that spends more money we don’t have on programs that we can’t afford, making problems like inflation and the supply chain crisis worse.

“The America COMPETES Act should be scrapped for real competition, and for letting taxpayers call the shots with their own money. That too takes work; urgent work and a commitment that is avoided by the current central-government-centric approach.”

Director of CEI’s Center for Energy and Environment Myron Ebell said:

“For a bill that purports to improve American competitiveness with China, House Democrats’ COMPETES Act sure has a lot of provisions that would harm the U. S. economy and benefit China.  For example, it approves implementation of the Paris climate treaty, which would destroy America’s coal, oil, and natural gas industries and cause energy prices to skyrocket.  Meanwhile, China is ‘implementing’ the Paris climate treaty by using more and more coal. China accounted for 53 percent of global coal consumption in 2020, according to the International Energy Agency.”

Senior Fellow Ryan Young said:

“It is not enough to oppose something. Reformers should also give positive alternatives. So, while Congress should not pass yet another spending bill, there are still plenty of good policies they should pass instead. These include allowing the Fed to tamp down inflation without political interference; removing tariffs that clog supply networks and raise the price of industrial inputs such as steel by as much as 25 percent; reforming a regulatory system that has more than a million individual regulatory restrictions and costs almost 10 percent of GDP; and reforming out-of-control occupation licensing that affects a quarter of all workers and blocks opportunities for millions of people. Unlike the America COMPETES Act, implementing these ideas would make American businesses more competitive.”

Research Fellow Ryan Nabil and Director of Finance Policy John Berlau added:

“The act includes a provision—called the National Critical Capabilities Review—which would introduce a new legislative framework to regulate outbound investment from the United States. Unfortunately, the proposed framework’s overly broad scope risks reducing both outbound investment from the US and inbound foreign investment to the United States, damaging U.S. competitiveness against other nations, including China. The provision will create unnecessary regulatory uncertainty for many businesses whose transactions have little or no national security implications.”

Research Fellow Sean Higgins said:

“The America Competes Act will require any recipient of a grant or loan for making solar panel components to ‘remain neutral’—i.e., open their doors and don’t resist—towards any effort to unionize their facility. This is little more than a gift to organized labor because it will ensure workers hear only pro-union rhetoric.

“It includes so-called ‘card check’ language forcing companies to simply accept a union’s claim that it has majority support of the workers, pre-empting a federally-monitored secret ballot vote to verify the claim. If the union’s claim was genuine, it has nothing to fear from the workers voting.

“These provisions mostly involve making it easier for unions to tell workers to get in line and have nothing to do with making America more competitive against China.”


Young: The COMPETES Act Is a Bad Idea. Here’s What Congress Should Do Instead