Congressman Rudy Yakym (IN-02) participated in a Ways and Means Hearing with Treasury Secretary Scott Bessent to highlight the growing economic threat posed by China’s industrial overcapacity, calling it a danger to global markets and American industry.
"China’s industrial overcapacity is not just flooding our markets with cheap goods. It is a direct threat to American workers, manufacturers, and long-term economic security,” Rep. Yakym said. “I applaud Secretary Bessent and the administration for recognizing this danger and taking meaningful steps to address it. Their efforts to coordinate with Canada and Mexico and reinforce Fortress North America are exactly the kind of leadership we need to protect our supply chains and our sovereignty."
Rep. Yakym: China has plowed nearly two trillion dollars over the last four years into increasing factory production and construction. But those factories aren't just churning out gizmos and gadgets for domestic consumption. It's doubling down on their overcapacity, and the numbers bear that out. Exports from China rose 13% in 2023 and 17% in 2024. It seems like there's a global recognition of the threat posed by Chinese over capacity. The EU, Brazil, Indonesia, Thailand, and others have also imposed tariffs on China to counter the flood of cheap imports, not just us. You talked in the past about a, quote, fortress North America, which we would coordinate with Canada and Mexico on Chinese overcapacity. Can you please give an update on administration efforts around this?
Secretary Bessent: So, China accounts for approximately 30% of global manufacturing. They're on their way to 40%. That is unsustainable. I warned our allies that when we put our tariff wall around China, that the goods and services, which I would say are the equivalent of that Disney movie where the brooms carry the buckets of water, that's the Chinese business model. And I warned them the goods will come ashore in Europe, in Canada, in Australia. And unfortunately, I was proven correct. So, they are seeing substantial price deflation from China, especially in things like EVs. We think that it's important not to have trans-shipment. So, goods cannot move from China to Vietnam to the U.S., from China. And the reason I talked about fortress North America because the greatest opportunity for trans-shipment is via Mexico or Canada using USMCA. Our trade partners are very responsive to this. They have made some very good offers on it.
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