Rubio Concerned CBP Won't Vigorously Enforce New Uyghur Import Ban
As CBP works to implement the Uyghur Forced Labor Prevention Act, its champion, Sen. Marco Rubio, R-Fla., told International Trade Today he's concerned that CBP will not strictly enforce the law, which says that any good with any input from China's Xinjiang region is assumed to contain forced labor.
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Rubio, who took the question about his bill after a speech on China at the Heritage Foundation March 29, said if CBP follows the law, it would require them to force "companies to show you, if they can, how this [import] is produced. Or relocate their productive capacity away from that place, because of the presumption."
He said if they do that, then the law will work. "If we have an administration that decides to use that as leverage, and say, 'Well, let's not enforce it too strictly, because the corporate lobbyists are here banging at the door of the White House, and by the way, we don't want China to be upset at us, because we want to do a green new deal climate thing with them,' then I think we're going to have a problem.
"It's my hope the spirit with which the White House was lobbying against my bill ... asking us to slow it down and not to pass this -- let's hope that spirit is not the spirit that infuses how this is enforced. Because if it is, then the law's not going to be very effective." Rubio said the threat from Beijing is the biggest threat of our time.
He voted against the Senate's China package, and said that it throws money at university research that will be stolen easily by China. He said the "flawed bipartisan consensus on China" ended during the Trump administration, and that while Congress and Main Street have realized that economic dependency on China is dangerous, corporations have not caught up.
He questioned why the phase one deal included market access for financial firms, which he characterized as Wall Street subsidizing China's economy.
"Why did that happen? That happened because Beijing has and continues to deputize American corporations and turns them into their lobbyists and their advocates right here in Washington. It was American companies. It was American companies that lobbied to defeat, to stop, to impede my bill to block imports made with Uyghur slave labor in China. And not just any companies, iconic brands -- Nike, Coca-Cola and Apple. They were more interested in appeasing the Chinese Communist Party and Xi Jinping because that allows them to maximize their profit margins. More interested in that than doing what is both morally right and good for their country."
In the Q&A after his speech, Rubio said the former belief that economically engaging with China would help liberalize its economy and its politics was mistaken. "The problem is, capitalism didn't change China. China changed capitalism in China."
He said capitalism is about companies competing on comparative advantage under the same set of rules. "That's not what we have. China's not capitalist. Their companies are heavily subsidized. They have exclusive access to their marketplace. They don't respect intellectual property. They don't respect the trademarks, the copyrights, the patents. They don't respect trade secrets. To allow an American business to do work in China, you have to partner with one of their companies until the company learns to do what you do, and then they kick you out. Hell, that's not capitalism, that's cheating!
"That's like allowing one team to play basketball with five people and the other team to have ten. And then people argue, 'Well, you're against basketball.' No, I'm not. I'm against 10-on-5," he said to applause.
Competition with China was also the topic of webinar March 29 at the American Enterprise Institute, where Liza Tobin, a senior director for economy at the Special Competitive Studies Project, said it's not just the Trump trade war that changed the way both policymakers and corporations thought about investing in and sourcing from China. The SCSP is a think tank that makes recommendations on how to win the techno-competitive race between now and 2030, particularly in emerging technologies like artificial intelligence.
Tobin said that for years, importing from China was seen as something of mutual benefit to the U.S. and China, and "ideas of decoupling were almost a laughingstock." She said the trade war, the pandemic, and now the "sudden decoupling of Russia from many advanced economies, has caused a lot of people to go back and question assumptions about whether this bilateral economic and technological entanglement is really as good as we thought."
She added: "This debate we’re having about decoupling, we need to move beyond that. Is it good or bad? Is it possible or impossible? These are far too black-and- white debates." She said decoupling is happening in some sectors and in some supply chains, and that companies that are preparing for the trends that she said are already underway "are going to be more resilient in the future."
Fellow panelist Matthew Turpin, a former Commerce Department official now at the Hoover Institution think tank, said, "It’s important for businesses to understand business models follow geopolitics, not the other way around. If Ukraine hasn’t provided an exclamation mark to that truism, I don’t know what does."
He said executives need to be reexamining all their assumptions about sourcing and investment. "It doesn't mean no trade," he added, but he said "the old incumbents are the loudest voices today asking for no change. That’s probably not realistic."