Major American businesses and trade groups are fighting newly proposed legislation intended to protect U.S. industries deemed critical to national security from China.
A bipartisan group of senators and representatives proposed legislation for inclusion within the Bipartisan Innovation Act (BIA) on June 13 that intends to protect American manufacturing power within industries considered vital to U.S. national security, the lawmakers said in a joint statement. However, organizations with vested business interests in China reportedly intend to fight the legislation, according to The Wall Street Journal.
Douglas K. Barry, senior director of communications at The U.S.-China Business Council (USCBC), told The Daily Caller News Foundation that his organization opposes the legislation, claiming it will lead to regulatory uncertainty which will paralyze companies and harm U.S. supply chains.
“We appreciate the need to ensure U.S. investments abroad do not cause national security concerns,” Barry told TheDCNF. “However, a unilateral mechanism like that in the House-passed COMPETES Act would be far too broad in covering many sectors not critical to national security, create tremendous uncertainty and reduce the competitiveness of U.S. companies.”
Over 250 companies belong to USCBC, including Airbnb, Coca-Cola, Intel, Procter & Gamble, Visa and Snickers. Despite the ongoing genocide of Uyghurs and other ethnic minorities in China, these six American companies officially sponsored the 2022 Beijing Winter Olympics. Yet, these companies suspended their business operations in Russia following the Kremlin’s invasion of Ukraine.
The newly proposed legislation would reportedly require U.S. companies to disclose their intention to invest in the development of sensitive technologies — such as drones, hypersonics and pharmaceuticals — within China and other “foreign adversaries,” The Wall Street Journal reported after reviewing a draft of the bill. A new interagency panel would then have the opportunity to vet and block those proposed foreign investments deemed vital to national security.
U.S. venture firms, such as Sequoia Capital, might therefore be impacted if the legislation is implemented, according to The Wall Street Journal. Sequoia Capital has reportedly made numerous direct investments to Chinese semiconductor, robotics and biotechnology companies and has also invested in a Chinese artificial intelligence firm blacklisted by the U.S. government in 2019 for “acting contrary to the foreign policy interests of the United States.”
The pro-China lobby, which includes both Chinese government lobbyists as well as non-governmental groups advocating on behalf of Chinese interests, has ramped up its efforts in recent years, spending in total around $68 million in 2019, $73 million in 2020 and $83 million in 2021, according to Open Secrets’ database. Major American corporations with vested business interests in China, such as Apple, Intel and Procter & Gamble, have lobbied on issues related to the United States Innovation and Competition Act (USICA) — of which the newly proposed legislation would become a part.
USCBC reportedly lobbied successfully to defeat an earlier push for similar legislation requiring government reviews of U.S. investments in China in 2021, according to Politico. The National Retail Federation, which represents major U.S. retailers, also joined in efforts to oppose anti-China competition bills, Politico reported.
“USCBC is, in essence, a pro-CCP interest lobbying group,” Fu said. “USCBC is, at least, partially responsible for successfully making America dependent on China, resulting in massive strategic national security losses for the U.S., including the ongoing supply chain disaster.”
Fu said that USCBC has a clear track record of downplaying China’s human rights violations while also safeguarding China’s access to the lucrative U.S. business market.
Speaking at a 1997 hearing before the Subcommittee on Trade regarding renewing China’s most-favored-nation status, former USCBC head Robert A. Kapp argued that China’s human rights violations shouldn’t be a moral obstacle to U.S. trade.
“The notion of turning the [most-favored-nation] vote into a litmus test of the moral integrity of individual members of Congress is absolutely astounding,” Kapp said. “To say to a member of Congress — as many members have told me they have themselves been told — that their vote on a tariff measure on Chinese imports is a measure of their commitment to their most fundamental moral beliefs is an extraordinary, heavy and unacceptable burden to place on individual members of Congress, whose integrity is not in doubt.”
However, Barry called claims that USCBC had ever downplayed China’s human rights violations for the sake of business interests “utter nonsense.”
“USCBC has rarely advocated for American or Chinese workers’ rights and interests, nor does it support any initiatives on universal human rights and religious freedom issues,” said Fu. “Instead, its influence over the years provides platforms for CCP leaders’ propaganda activities, such as lobbying the U.S. government to grant China permanent normal trade relations and most-favored-nation status by delinking business with human rights in China, then helping China’s entry into the World Trade Organization.”
Barry told TheDCNF that USCBC also opposes the Uyghur Forced Labor Prevention Act (UFLPA) — which came into force Tuesday — and requires American companies to ensure their supply chains are free from products created using Uyghur slave labor. Barry argued the newly proposed legislation might lead to regulatory uncertainty and compliance issues for U.S. businesses.
“[UFLPA] will create significant uncertainty, further snarl already stressed supply chains, and contribute to inflation,” Barry told TheDCNF. “We are expecting implementation to be messy. [Customs and Border Protection] has had to scramble to implement a complex piece of legislation in only six months.”
USCBC lobbied against the UFLPA in March 2022 by submitting comments outlining their objections to the Department of Homeland Security. Among the objections, USCBC criticized the act’s implementation timeline and characterized its scope as “extremely broad.”
Meanwhile, Apple, Coca-Cola, Nike and other American companies reportedly identified as having been beneficiaries of Uyghur slave labor by the Australian Strategic Policy Institute in March 2020 are members of USCBC.
Apple, Coca-Cola, Nike, Airbnb, Intel, Procter & Gamble, Visa, Snickers and Sequoia Capital did not respond to TheDCNF’s request for comment.