WASHINGTON – In a Senate confirmation hearing, President Joe Biden’s nominee to run the Commerce Department said she plans to be “very aggressive” in combating China’s “unfair” trade practices, but declined to detail how she would handle issues such as Chinese tech giant Huawei or the steel and aluminum tariffs imposed under President Donald Trump.
Rhode Island Gov. Gina Raimondo also pledged to help the American economy recover from the pandemic, to expand broadband access to regions with patchy Internet connections and to promote manufacturing and clean-energy jobs.
On China, she said the United States needs to develop a “whole of government response,” in coordination with U.S. allies, to combat unfair trade practices, which U.S. officials say include China’s theft of intellectual property, its hefty state subsidy of industry and its efforts to block Western access to the Chinese market.
One of the Trump administration’s favorite tools for punishing China was the Entity List, a compilation of companies deemed threats to national security to which U.S. exports are blocked. The Commerce Department oversees the list, which under Trump grew to include more than 300 Chinese entities, including the telecom equipment manufacturer Huawei, large semiconductor and drone manufacturers, and companies engaged in alleged human rights violations against ethnic minorities in China’s Xinjiang region.
Asked by Sen. Ted Cruz, R-Texas, whether companies accused of human rights abuses would remain on the list, Raimondo said: “China’s actions have been anticompetitive, hurtful to American workers and businesses, coercive and, as you point out, they are culpable for atrocious human rights abuses.”
“Whether it’s the Entity List or tariffs or countervailing duties, I intend to use all those tools to the fullest extent possible to level the playing field for the American worker. I believe in free trade but fair trade,” she added.
Asked whether Huawei would remain on the list, Raimondo said she would “review the policy, consult with you, consult with industry, consult with our allies and make an assessment about what’s best for American national security and economic security.”
The Trump administration added Huawei and its affiliates to the Entity List in May 2019, hoping to undermine the company’s ability to produce equipment for 5G mobile networks. It then tightened the rules several times, most recently by banning chip factories anywhere in the world from supplying Huawei if they use U.S. manufacturing equipment or chip-design software.
The U.S. semiconductor industry has pushed officials to narrow the prohibitions, saying they are broader than necessary to protect national security and are costing the sector billions of dollars of sales to Huawei, which was once a major customer. The industry has urged that rules be eased so that sales to Huawei of “commoditized” semiconductors – the kind used in cellphones and other consumer electronics – can resume.
Raimondo said the Commerce Department needs not only to “play defense” against China but also to “play offense” by doing more to promote U.S. technology, including by getting more involved in the global organizations that set tech standards. China’s government has taken an organized approach to promoting its companies’ standards at those organizations, sparking calls for the United States to do more.
“One area Commerce has missed is playing a role in standards setting. I believe America has to lead in standards setting, particularly in new technology,” Raimondo said. “That’s one way we could help Americans to compete and lead and win.”
The Commerce Department played a central role in the tariffs Trump levied on imported steel and aluminum, saying in a 2018 report that the imports threatened national security.
During Tuesday’s hearing, Sen. Roy Blunt, R-Mo., complained that those tariffs were raising costs for manufacturers in his state.
Raimondo said the tariffs, levied on imports from China, the European Union, Canada and other regions, were also affecting manufacturers in her state.
“Having said that, China has clearly behaved in ways that are anti-competitive, dumping cheap steel and aluminum into America, which hurts American workers and hurts the ability of our companies to compete,” Raimondo said. “So should I be confirmed, I plan to be very aggressive to help Americans compete against the unfair practices of China.”
She said the administration plans to review all trade policies in consultation with allies and domestic companies. She also noted that there is a process for U.S. companies to seek waivers excluding them from paying the import tariffs, and that she will ensure that the process is “swift, fair and objective and helps to balance the competing interest.”