The U.S. Congress is one step closer this week to passing major legislation addressing competitiveness with China. The America Competes Act passed the U.S. Senate on Monday on a vote of 68-28, setting the stage for the legislation to be reconciled in the U.S. House of Representatives for final passage. A significantly different version of that legislation passed the U.S. House in February on a vote of 222-210. 

 

The White House welcomed progress on the legislation in a statement Monday night, saying “there is clear bipartisan support for the sorts of investments the president has long championed — like boosting domestic manufacturing, supporting our innovators and helping them take their ideas from the lab to the factory floor, as well as addressing supply chain bottlenecks like semiconductors that are raising prices on the middle class.” 

 

The multibillion-dollar legislation addresses the U.S. supply chain and research, as well as development issues, to lessen dependence on Chinese-manufactured products by providing $52 billion for the U.S. manufacture of semiconductors, and $2 billion for the manufacture of critical electronics, defense and automobile components. 

 

The legislation also addresses human rights and democracy issues by providing funding for U.S.-Taiwan cultural exchanges, recognizing Taiwan as part of the U.S.’s Indo-Pacific strategy, and ending a prohibition of displaying the Taiwanese flag during official visits to the U.S. 

Senate Intelligence Committee Chairman Mark Warner tweeted Tuesday, “Passing the America COMPETES Act would mean taking real action towards addressing long-term inflation and making a targeted investment in American manufacturing. I’ve been working on this bill from the beginning, and I’m ready to get it done.” 

 

Senate Majority Leader Chuck Schumer said the process of reconciling the Senate and House versions would begin by the end of this week. 

 

“I believe this bill will go down as one of the most important steps Congress can take toward creating more American jobs, fixing our supply chains, and refueling another generation of American ingenuity that will strengthen our economy for a long, long time,” Schumer said on the Senate floor Tuesday. 

 

While the legislation has some bipartisan support, one top Republican on the Senate Foreign Relations and Intelligence Committees said it did not do enough. 

In a speech about the threat posed by Communist China at the conservative research group Heritage Foundation, Senator Marco Rubio referred to the America Competes Act as “this so-called China bill.” 

 

Rubio said “it takes meaningful steps toward reinvesting in our nation’s capabilities. So, there’s good things in that bill, but it doesn’t build sufficient safeguards to protect taxpayer-funded research and industrial investment. And it’s because of pressure from universities and industry, support of billions of dollars, hundreds of millions of dollars, tens of millions of dollars into activities that the Chinese are stealing now, except with less money. Now they’ll just have access to more to steal.” 

 

Rubio went on to argue that the problem cannot truly be solved until China stops lobbying American companies to protect its interest. Rubio said his legislation blocking imports made with slave labor has received opposition from American companies. 

 

“They were more interested in appeasing the Chinese Communist Party and Xi Jinping because that allows them to maximize their profit margins, are interested in that, than doing what is both morally right and good for their country,” Rubio said Tuesday.  

 

In response to passage of the bill, China’s Foreign Ministry spokesperson, Wang Wenbin, told reporters, “The China-related content of the relevant bills disregards the facts, exaggerates the theory of the China threat, advocates strategic competition with China, and is full of Cold War zero-sum thinking, which runs counter to the common desire of all walks of life in China and the United States to strengthen exchanges and cooperation. China firmly opposes this and will firmly defend its own interests.”