'Positive Economic Agenda' Needed to Counter China, Former US Officials Say

While the U.S. should look to counter China with export controls, tariffs and outbound investment restrictions, it also needs to better incentivize trading partners to diversify their supply chains away from China, the Atlantic Council said this week.

A May 7 blog post by former Trump administration officials Kaush Arha and Clete Willems and former Biden administration official Peter Harrell, building on a report released by the House Select Committee on China in December (see 2312120004 and 2312120050), said the U.S. needs to pursue a “positive economic agenda” with its allies. That agenda would help “incentivize the private sector -- both in the United States and overseas -- to diversify important supply chains away from China,” the former officials wrote.

The officials also said revoking China’s permanent normal trade relations status would be “inefficient, outdated, and counterproductive.” They sided with an idea in the select committee’s report that would create a new tariff column for China and renew certain World Trade Organization safeguard mechanisms, which “offers a promising foundation for a more modern and modulated trading framework with” China and “should be put in action in close coordination” with U.S. allies.

The former officials also said the Commerce Department’s recent export controls on semiconductors (see 2310170055) are an “important start” and should be followed by outbound investment restrictions, which are expected later this year (see 2405080039). The government also should work with U.S. and allied universities and researchers “on a principled, pragmatic, and robust cross-border research protocol to preclude [China’s] intellectual theft and unauthorized technology transfer,” they said.