H.R. 5846 “Neutralizing Unfair Chinese Export Subsidies Act of 2020”: An Analysis
The bill was first introduced on the 11th of February of this year and seeks to curtail China’s targeted export subsidies, which artificially increases the competitiveness of China’s exports at the expense of their competitors, in particular those who are the main destination markets for these exports. In its current form, the bill does not go into much detail regarding the mechanisms that are to be used to ensure compliance on the part of the CCP. One of the underlying issues with regards to global trade is that China is treated like any other developing country, with all the sympathies that come with this designation.
While China is indeed a developing country outside the coastal cities, it is foolish to look at China the same way the United States would look at, say, Peru, or even Mexico. Adjusted for purchasing power, China’s economy has exceeded that of the United States since 2015, and the gap continues to widen. So, while China does indeed have fewer economic resources per person, their greater overall pool of resources can be deployed in pursuit of specific political goals in a way that the United States is not capable of, both quantitatively and qualitatively.
VERDICT: RNR approved
During debates, it will be important for proponents of the bill to remember that the Dollar’s reserve currency status is what makes this legislation desirable. Using examples of other countries such as Switzerland who have strong currencies as well as healthy current account surpluses as a refutational example by opponents of the bill are not applicable. No other country has to deal with the destabilizing effects that reserve currency status has on domestic industry. Most capital inflows into the United States are used to either purchase nationally strategic assets, which drive up asset prices artificially, or provide dangerous amounts of credit to American consumers which will undermine the overall household balance sheet of the country.
While certainly far from a panacea, this bill represents an incredibly good precedent in economic policy that is explicitly focused on protecting the American people even if it might be at the expense of foreign nationals.
The Republicans for National Renewal therefore approves S. 2357 “Competitive Dollar for Jobs and Prosperity Act” to level the playing field against unfair globalist rules. The Senate Committee on Banking, Housing , and Urban Affairs is where this legislation is currently active in as of the last action on July 31st, 2019 when the bill was read twice.