HEARING

its way through the process, but I wanted if you could talk about why these bills are important, why there's an urgency for us to act, and why Congress should be taking the initiative on this.

Sure, I'm happy to start. Um One thing that we're noticing is that China is pursuing scale where they see connectivity, physical control, and then market concentration. And it happens to be in the robotics and vehicle space. These are not just cars, they're Huawei with wheels. Uh, these aren't just robots. Um, we're already seeing the Chinese start to incorporate humanoid and quadruped robots into PLA planning, including for the invasion of Taiwan. I think what we have to remember is that the common denominator between these two uh pillars and sectors is ubiquity of them. Uh, we haven't made a national security risk assessment yet about the threat posed by the sensors that are on these vehicles and what they can collect and where they can travel across our country and we might not make that determination before they are everywhere and then it'll be too late. So I think these two bills really address that challenge up front and they do so in a way that has been highly successful on the drone front.

Uh, I certainly agree with all of that. I I would add a of things one is that i think it's very important for congress to act on these kinds of issues rather than to leave even similar administrative actions in place uh the legislation both makes it permanent which is important for negotiating purposes these are things we are taking off the table from potential negotiations uh and second it create creates the certainty that we really need for that domestic investment to come in line i think the other thing and and this goes to mister singleton's point We should do these now before they penetrate our market. Ranking member Carson highlighted the issue of real cost we face as we try to strip out dependencies anywhere there is something that is obviously going to be very important and we can obstruct it before it makes inroads into the market. Time is of the essence. Uh, and then the final thing I would just say is that I think it's important, particularly on the connected vehicle side, to realize that the connected nature is a - a primary national security concern. Uh, but fundamentally the broader question is just do we want to allow China to destroy our auto industry. And connected, unconnected, conventional electric, the answer simply has to be no.

I will pick up on the point Mister Cass made, as well as Mister Singleton, about the importance of acting before these products fully penetrate our market. We have seen incredibly rapid growth of Chinese internet-connected vehicles in Europe, uh and in other markets where they have not uh been restricted you know going from low single digits to twenty twenty five percent of new sales in a matter of eighteen to twenty four months uh i think that if we do not have strong and durable action here in the us you can see a similar trajectory of penetration by chinese cars and it is going to be much cheaper and much more effective to address that early i think robots is similar but in some ways um even more important. You know, we saw ten years ago, when drones first became uh common, uh the development of an entire industrial ecosystem uh in China to build those drones that we now have to recreate largely out of whole cloth here in the United States, at great cost. Robots are at a similar point, but ver- a decade ago were in the early stages of building out a humanoid robot industrial base and we want that here, rather than waiting five or ten years where we're gonna have to pay tens of billions of dollars to replicate something the Chinese have already done.

Thank you. Um, Mister Cass, I wanted to follow up with you on one of your points that you were making about the incentives for American businesses versus how Chinese businesses affiliated with the CCP um what their incentive structure is. Could you elaborate a little bit more because I think that's a really important point that we need to understand when we're talking about these kinds of issues.

Yeah, thank you. I, you know, it goes really to the original mistake we made in in opening up to trade with China, which is our too frequent assumption as Americans that everybody is like us and and everybody is is playing by the same rules. The reality is that all of our assumptions about capitalism and free markets and the good outcomes those generate require certain things to be in place. And if you try to do free trade with a country like China, that is communist, authoritarian, state-controlled market, very aggressive industrial strategy, you are importing all of those distortions into your market. And so it it's not symmetrical, right? We said we were going to export liberty to China, and they were very happy to block that. Instead, they are exporting their economic priorities to us. And so whereas we tend to think of free markets and free trade as going together, when it comes to a country like China, really it is free market or free trade, pick one. And if we value our free market, we actually need to establish a boundary that keeps China and its firms out.

Thank you. I, my time has expired and I wanna make sure we get to other members. Uh, Representative Carson.

Thank you, Chairman. Um, in my district, the FedEx Express Hub at the Indy International Airport is the second largest FedEx global network. It employs about four thousand people and sorts out about a hundred thousand packages an hour. A huge share of that is international freight, so including low-value parcels shipped directly from Chinese sellers. Mister Harrell, when when when Congress or an agency restricts a Chinese product from the US market, how often do the Chinese sellers cheat um their way through hubs like Indy.

I think that's a hugely important um challenge, and we have seen over the last uh five, six years what I think of as two different kinds of Chinese uh cheating, one of which is illegal and one of which is legal. Uh, and they're both quite common. So the illegal form is China creates a product in China They ship it to Vietnam, they slap a little Made in Vietnam uh label on it, and that comes to the US. Illegal today? There's a huge enforcement issue. We need to get, you know, CBP as well as importers focused more on the data. The other thing they do is legal. They ship, by by and large, they ship a box of parts from China to Vietnam. They get it assembled into a thing in Vietnam and it comes to the United States that way. Uh, and that's usually legal. under US law, because it counts as a Vietnamese product, and I do think this is an area we need to think about for these high-risk national security products so how do we look at where some of the pieces come from, not just where this thing was actually put together.

We often talk and assume restricting Chinese products from the US market as if American innovation and even manufacturing capacity will simply appear to fill that gap. We know it won't, but especially without workers and government support for innovation. And of course, manufacturers nationally report more than four hundred thousand open positions right now, and industry researchers project up up to one point nine million unfilled manufacturing jobs by twenty twenty three. Um, of the tools that are s discussed today, like procurement preferences, tax credits, r and d manufacturing incentives which ones actually help to train workers and really support us innovation in you all's minds

uh i think you've put your finger on a a very important issue which is that workforce development needs to come alongside the research the capital investment, and so forth uh i think it's important to say that we also need those other things in other words developing the workforce first will not work. If we don't have investment committed, if we don't have firms looking for workers, knowing what they need, knowing what skills they need, creating that pull, just doing the training is is a recipe for failure. Uh, so I think what we've seen with the CHIPS Act is actually an illustration of a very good model, where training a semiconductor workforce first would not have been a good idea, but in conjunction with the incentives firms like micron and tsmc to start making these investments in fabs uh those firms have then had an enormous incentive to go out and partner with community colleges to define what the curriculum is to partner with labor unions very importantly and then i think there's an added federal role in making sure that we are contributing to the cost of that kind of thing we put hundreds of billions of dollars into traditional higher education but if you're actually trying to prepare to work in a fab for the most part we just sort of say good luck. And so I think rethinking what kinds of job preparation we support, ideally not going industry by industry, but saying where there are firms out there that are investing, they're partnering with community colleges, here's a form of support that comes from the public as well, just as it would for traditional education, uh, is a huge accelerator of that.

I would just add on to Mister Cass's points, and I agree entirely. This is where public-private partnerships are just so important. The reason that the CHIPS Act has been successful is that we set the security destination early for markets and the private sector and then we gave industry a credible runway to get there so identifying those high-risk technologies early I think and applying firm time-bound sort of phase-outs allows us to get there. I do think we have to sort of though match some of these time lines to replacement difficulty and that's something you mentioned. I don't think we need to make everything here. I don't think we need to make replace Chinese toasters, right? But if we wanna be thinking about controlling the drivers of the twenty-first century Industrial Revolution and empowering American workers to lead that revolution, we have to identify those core technologies now, and that's why hearings like this are so important.

Thank you. Representative Hinson.

Thank you, Mr. Chairman, and uh good morning to our witnesses. Thank you so much for being here today. Um, today's topic, obviously a critically important one, and we have um a responsibility to look at uh really methodically and with careful consideration. Uh we know how China likes to play this game, they cheat, they dominate the marketplace across too many industries and uh then they steal as well. So uh I would like to focus today on understanding how some of the critical supply chain conversations and concerns really impact Iowans um back home specifically uh with one uh we call it a life-sustaining and life-saving uh product, but infant formula. um which is a a concern near and dear to my heart. Uh so Mister Cass in your written testimony you talk about how China now controls seventy percent upwards of ninety percent of the global supply of inputs to make key pharmaceuticals and so I think um when I speak for all of us when I say those numbers are way too high and frankly alarming in terms of dependency on China for that supply chain so not only do they dominate in APIs but also in um key uh starting materials the micronutrients and um the precursors that are really critical uh to making infant formula and um and medications too but um just like medication um not all that information is reflected necessarily on the label um and as a mom myself I believe everybody who is walking into a drug store deserves as much transparency as we can get on what they're buying and so uh one of the pieces of legislation that I worked with um Congresswoman Matsuian across the aisle was the Drug Origin Transparency Act this gives FDA the authority to be able to require more detailed reporting on the suppliers of each API and then also the intermediate product out of that, um, including identifying the original manufacturers and suppliers in the supply chain. So, uh, my question to you, mister Cass, is what actions would you recommend that we implement to help not only onshore, the domestic supply of APIs, um, but other key starting materials as well, um, in in inputs because I think it it comes down to really being able to decrease our reliance on, uh, China not just for these again day-to-day medications but for things like infant formula.

Uh thank you for the question and for focusing on this issue which I I think is an incredibly important one. Uh and to your point about you know the consumer side, I think probably we can't expect consumers to you know uh choose American made Tylenol over Chinese made Tylenol, but I think the labeling is incredibly important in raising awareness of the problem, and understanding that we need to do something about it. I think the policy tools that can be most effective here uh actually are exactly the these sorts of import controls that we're talking about at this hearing, because this is an example of the kind of product that we certainly know how to make here, we used to make it all here, uh in many cases we s- still have half shuttered or shuttered facilities that did make it, we have some capacity but not a lot, uh and I think if we simply had very clear policies that said, look the amount of stuff you can bring in from China is going to phase down at this rate over the next five years there is very little preventing the companies that are the ultimate sellers of it that are very sophisticated pharmaceutical manufacturers from increasing that capacity again either here or sourcing from allies uh and also the good news that it it's simply not that much more expensive. I mean when we're talking about some of these things figuring out how to do it here, building it, cost differentials are gonna be huge The cost difference on the bottle of Tylenol is not going to be huge.

Right, if it's a difference between, you know, you look at uh a hundred fifty percent price increase versus if it's fifty percent more and we're not reliant on the supply chain and then if something bad happens, we we have the materials and we have the inputs that we can make our own medicine, I think that most consumers would find a relief in that um certainly. And obviously it still needs to be consumer choice driven and I'm a big supporter of that, um you know, consumers just need the education to be able to to know what they're buying. Um question on you you talked about some of these facilities that have been shuttered. Uh, how quickly do you think that we could turn that around, right? And on the manufacturing side we've we've done what we think we need to do to really p- do the shot in the arm and give businesses a certainty they need in tax policy to make those investments how quickly do you think that could happen?

Uh, I am not an expert on on the exact speed. Um, I would just distinguish it from something like electric vehicle batteries or drones where we have no footprint we have no infrastructure we have no logistical support Um bringing back online things that we have historically done here, that we are still doing some of, is going to be a lot easier. Uh and just the one thing I would mention, I don't think it's a it's not a fifty percent uh swing in the title, it's it's likely to be a few cents. Um Professor Willy Shih at Harvard Business School, his entire area of expertise is international supply chains, makes this point specifically in the metal c- medical context. If you look at something like syringes, we've entirely offshored the production of syringes over essentially a penny. And that's because who buys the syringes? It's hospital systems buying, you know, ten million syringes.

Massive amounts, right.

And so for that you say like, oh well, sure we'll go overseas for the penny. In terms of what it looks like to the American consumer at the end of the day, to have American-made stuff in a lot of these areas, it it really is a matter of pennies.

OK.

Thank you. Uh, I'm over time, Mr. Chairman. I yield back.

Thank you. Representative Krishnamoorthy.

Thank you, Mr. Chair. First, I'd like to discuss the need for frameworks for importing not just goods from China, but also open weight AI models. Unlike closed models such as ChatGPT, open weight models can be downloaded, changed and run on a user's own device. Mr. Harrell, good to see you. American companies have quickly adopted Chinese open weight models because as your testimony notes these model weights are on-line free for anyone to download, right?

Yes, correct.

But there's no such thing as a free lunch. There's always a cost. First, there's a data cost. As we see here in the Chinese model, deep-seek's own privacy statement, deep-seek directly collects processes and stores your personal data in the People's Republic of China. They very helpfully pointed that out, right, Mister Harrell?

Uh, they do point that out.

Second, even if a user downloads and uses a Chinese AI model locally on their own device, the model may not be trustworthy. According to the Commerce Department, deep-seek AI agents are twelve times more likely than US models to follow malicious instructions, including sending phishing emails and running malware. Mister Harrell, in your testimony you note that the US does not have a law that clearly authorizes restrictions on Americans downloading and using open weight models, correct?

Yeah, that's correct, we do not.

Any restrictions deserve extreme scrutiny. But I believe that we in America should have certain restrictions that safeguard all Americans when using open weight models. especially from adversary countries. As a first step, the federal government should not procure any such models. My bill, the no adversarial AI act, prohibits that potential practice. I'd like to turn to another uh topic. Mister Harrell, in your written testimony you said that quote " the US needs to make sure that it is working with allies and partners by default." That's what you wrote, right?

That's correct.

But how is Trump treating our allies? by imposing blanket tariffs and starting trade wars. Last year on Liberation Day, Trump set sweeping tariffs on nearly every country, including our closest allies, right?

Uh, yes, we have seen a historic increase in tariffs on dozens of countries.

And after the Supreme Court found those blanket tariffs were illegal, the President turned to other tactics, such as threatening to ban products from our closest partners. Just look at Canada. Last week, as we can see here, he said, no more selling Bombardier and the Unite Bombardier planes in the United States. Their products aren't good enough. That's what he wrote, right?

Uh, yes.

These tactics have a cost. They threaten more than one hundred jobs in my district at the Bombardier facility there. And as this Pew chart shows, Canadians now view China more positively than the US. We need our allies in order to have a strong coalition to counter and police the CCP's aggression on a number of fronts. But we are threatening that coalition with bully behavior, and it will hurt Americans as much as our trading partners. We gotta stop this. Let me turn to my final topic. This year, President Trump has repeatedly said he'd be quote " okay" with China building cars in the US. Uh, Mister Harrell, the current barriers to Chinese EVs being produced and sold in the US are not fixed in statute but instead instead are upheld at the direct at the discretion of the president, right?

That is correct.

Mister Cass, CSIS estimates Beijing has supported EV se EV sector companies with more than two hundred and thirty billion dollars since twenty O nine, which has given them a serious leg up. Just look at these prices of EVs. An average Chinese EV costs ten thousand dollars,

Yes, that's correct.

Mm-hmm.

I've said this before. And as they've used in the glass, the steel, the aluminum, the solar panel, the building and now the EV sector, they're using the same playbook, produce more stuff than they can consume, export it at a cost beneath their production cost, and destroy their competition. That is their playbook. And so if the president allows Chinese EVs and connected vehicles into our markets as some, as part of some grand deal next week, we are succumbing to Xi Jinping's playbook, and we will absolutely bargain away the entire auto industry in Michigan, among other places. So, Mister President, I would just say as a committee, I think we should say our auto industry is not for sale. Thank you and I yield back.

Thank you. Representative Takuda.

Thank you, Mister Chair. Um, I've got a lot of thoughts going through my brain, especially given next week, uh, who's coming to town, essentially so this hearing is very timely, uh on the issue of import controls um and market restrictions as a way to to reduce our dependency on China,

We'll see.

um I have to wonder, while we can have these robust discussions, about what comes in. Right now we've got a number of American companies that continue to build factories, sell products and enter into joint ventures and research in China itself. To what extent are those business decisions deepening our dependencies or potentially even transfer of technologies that our policies that we're talking about today, are intended to actually reduce? And then are we able to even track and measure vulnerability and dependency on Chinese products including not just the product itself but component parts, software, embedded technology? I think that's a serious risk. There was um conversation I think last year, Mister Chair, concerned about it as well when Ford entered into you know agreements, license agreements for EV battery technology with KATL, which is a PRC defense corporation. Um any thoughts there on if American corporate investment is literally undermining our ability to really decrease dependency and vulnerability from China and do we even have the capacity to track just how much China has us by the batteries and the and the EVs and the everything and the pharmaceuticals right now.

I'm happy to start. I'm not opposed to partnerships. I'm opposed to calling dependency a partnership. I think the CATL Ford deal is bad news, and I think that's a Trojan horse. It's worthy of additional scrutiny. It's deeply problematic. I think we have to hold ourselves to a question of if the Chinese partner in the deal disappears tomorrow, could the American operation in question keep going? Right? And if the answer is no, then you don't have a partnership. You have You have a dependency here. I think one of the big risks is that these partnerships can lock in future leverage over us. Once US production and workers and customers and supply chains depend on technologies from the PRC, unwinding that relationship becomes economically and politically harder.

Mr. Cass?

Uh, uh, I, uh, I certainly agree with, uh, with the your your broader point that there is there's a huge problem here on both sides. with what we are doing in China and what we might be allowing China to do here. Uh, I think there are also a lot of good actions being taken in that direction, particularly on something like uh, AI chips and chip manufacturing equipment. Uh, the house has has uh moved on on three very good bills in that respect. Uh, certainly I agree, something like uh, you know, the the battery partnership is a concern. Uh certainly the idea of of uh allowing Chinese companies to manufacture cars here uh is a a terrible idea. I think the the question in my mind is is who is actually on the other side of these arguments. Uh in my experience in uh in this hearing and uh another recent hearing at for the foreign affairs committee, uh even looking at you know what what the president's own cabinet uh is doing and saying, I don't see anyone on any side of the issue that doesn't wanna put a stop to this stuff, uh, except a few corporations that are making an enormous amount of money. And so from where I sit, the question is simply how quickly can you move forward? Because it is an entirely bipartisan topic, and whereas people are concerned about are we getting it exactly right, do we uh it would be very hard to be getting it more wrong than we have been getting it. I would much rather see very strong action that flips how we are operating, and then we can adjust from there. But Congress does need to move faster.

Mister Harrell.

So I think you raise a very important uh issue, and I think we have to expect companies are going to make the decisions they think are economically rational. That's just the the the reality of what they're going to do, and that is why policy is so important. Um, Under the Biden administration, the US government started an outbound investment rule to limit US investment in a handful of high technology sectors in China. Congress has expanded that with something called the Coins Act, which many members of the committee uh supported about a year ago, which is now being implemented. That act also, though, keeps those outbound investment restrictions fairly narrowly focused on high-tech sectors. I think there are important questions about how we should think about investment in China and what you might call industrial-based sectors, as well as high-tech sectors, and that the corporate community needs to understand that law and regulation may be coming, or else they're just gonna keep making the kind of economically rational decisions that they see today.

Thank you, and I know I've run out of time, but I think I agree with all of you, there's a lot of talk on the Hill and throughout the cabinet and throughout the country. We can't just do hand-wringing, we have to take action and have accountability, and I can tell you, um, Mister Cass, you touched upon it, I'm concerned next week when Xi comes here, we have been able to hold through export controls our greatest asset and advantage in the AI race, which is our most powerful chips, yet we have a president who has indicated he might be willing to sell if it means a profit to this country. We have to hold the line and make sure we do not literally give away the farm when it comes to our most powerful chips. And China's Nvidia will definitely be in town next week, and I think this Congress has to make sure we are strong when we say no chips to China. Thank you, I yield back.

Thank you. Representative Newhouse.

Thank you, Chairman Molinar, um, Ranking Member Khanna as well, for hosting today's hearing. I want to thank the witnesses for joining us today in sharing your testimony and your your knowledge on this very important subject. Um, so let me let me ask all three of you, if I could. Uh, in your testimonies you underscore the importance of being proactive, uh, meaning it's easier to prevent the US from developing supply chain dependencies than it is to decouple uh trade networks once they get entrenched. Um, how should the federal government's strategies, and in particular the use of these impor- import control strategies, differ when we think about um preventing future dependencies versus uh trying to decouple existing dependencies and um whoever would like to start or just go down the road any thoughts Mr. Hill

yeah thank you very much for the question and as you say congressman it is an area of agreement I think between all of us uh on the the committee I I think there are a couple of things the federal government should be doing here uh first I think we should start by having what you might think of as a survey of our import vulnerability Uh, this is something Australia did a couple of years ago. They actually looked in a fairly systematic way, what are the products where we mostly depend on imports, and then what are the, of those things where we mostly depend on imports, what are the products where we are mostly s- dependent on China for that, versed diversified, or dependent on friends. We've never really done something like that as a country, to try to get ahead uh of the problem. We kind of tend to wait till it it burbles up. Um, I do think as you say, it is important to look at areas uh, where um an industry is emerging because that is the opportunity to move now to foster investments here rather than trying to have to relocate them after the fact. That is why I think robots, for humanoid robots, is so important today. This is an industry that's going to boom over the next decade, um, and it will be much cheaper for us to get it right for investments here in the US today, than if we have to move that industry ten years from now when we're mostly dependent uh on China. Yes.

I I would add two considerations for for how we structure policy. The the nice thing about places where we are not yet dependent is it can just be a day one block. Uh, where we are dependent, there are are costs. And and I think that means two things. First of all, we would ideally have phased downs. Uh, to the extent that we are blocking stuff coming in faster than we can get it from somewhere else, we're really just hurting ourselves. Uh, and the second piece is I think we have to be a lot more thoughtful about the industrial policy to support the build-up of the replacements, because we need them to come online faster than they otherwise might in a natural market. Uh, so I think figuring out how long would it reasonably take to bring on capacity and set that kind of phase down in imports from China, and then what sorts of either subsidies or or public financing would help bring things online faster, uh helps to accelerate that as well. And and I would just underscore, we've talked about this a few times, this is a place where legislation is so important. I think administrative action can be fairly effective as we've seen with the FCC on things like robots, um but if let's say we were looking at pharmaceuticals or fertilizers, or certainly as we've seen with rare earths, uh you need that certainty and belief that, you know, this is actually happening. we can't sit it out and then scream and ask for a waiver uh to get the kind of shift that we need.

I would agree with both uh Peter and Orin. I think one of the challenges today is that so many of the existing authorities remain discretionary and episodic rather than standing and sectoral. Um if the risk is sectoral then the remedy has to be sectoral as well. The good news is that the Chinese can't stop talking about the areas and the sectors that they want to dominate. We're certainly not starting at zero. They have laid out the road map where they would like to entangle us, and it exists beyond advanced manufacturing, and I wholeheartedly agree on robots, the physical AI manifestation that will be heading into our shores in the next few years, and where China is ahead, but they have laid out their road map for the next five years. We don't have any guessing to do here.

Hmm.

I think prioritizing the risks and, to Mr. Carson's point, thinking about working with industry to identify where where are the areas that we do need more more public government support, where are the areas where the private sector can actually do this on their own. Um, it's going to be sector-specific, but we're not starting at zero here. The Chinese have laid out their road map.

Could I make one just quick uh uh point just to pick up on that.

Real quick.

It's a very important point. China published its Made in China twenty twenty-five strategy in in twenty fifteen. We we had the list of things. And likewise looking ahead it i- it is not impossible or even that hard to identify where we need to be concerned. To - to Mister Harrell's point at the margin, really understanding the supply chain is very important, but I think sometimes we get caught up in concern about, you know, so-called picking winners and losers, and how can policy makers know what's going on in the market. That's not what is going on here. That's not the nature of these determinations. These are exactly the places where I think uh, policymakers are are best equipped to make judgments.

OK. Well, unfortunately my time expired, Mr. Chairman.

Thank you. Representative Swasek. Thank you, Mr. Chairman, thank you witnesses, really appreciate all the good work that uh you all do on so many different topics. Thank you for being here today. Uh, you know, my view of the world is we're in this big competition. And on our side we've got us and Canada, who's on our team really. NATO and the Europeans, I would include Israel, I would include South Korea, Japan, and Australia. That's kind of like our side. We share our values. And then on the other side, we have the Chinese Communist Party, the Russians, the Iranians, the North Koreans. And then in between is, are different people on a continuum between those two poles. So there's this massive competition going on. And next week, the biggest strategic adversary we have, the president of the Chinese Communist Party, is coming to the United States of America to meet with our president. So can you just please explain to me What should we be doing? Should we be viewing this as a hawkish relationship between us and Ch- and China, where they're like, we gotta beat these guys, they're out to get us, they're cheating, they're treating their people terribly with the Uighurs and the Hong Kong students and the Tibetans and the Mongolians and they're threatening Taiwan. Uh, and we've gotta beat, and they're ch- they're they're stealing st- uh ideas from us and they're, have this strategic competition against us, really designed to beat us in every single way possible economically, militarily, air, land, space. Uh or should we be tr doing more of a cooperative relationship with them and trying to figure this out? Cuz we tried that for like fifty years, ever since Nixon went to China, and that didn't turn out very well for us. So I just need to understand the basic big picture of how we should view this relationship, from like the most extreme a hawkish type of thing, we don't wanna go to war obviously, but hawkish versus cooperative. And what's the biggest thing, the one thing, cuz there's many topics, there's so many details, what's the one thing we have to be careful of, in the meeting between our president and the president of the Chinese Communist Party, when he comes to town. So I'll just go in order. If you got three minutes, one minute apiece.

I think to be concise there, our strategy is quite simple. It should be to slow them down and to speed up. I think that should be the central focus.

Speed us up.

Speed ourselves up. That should be the central focus.

Especially in semiconductors and other technology and in and in other industry.

So many of the technologies we're talking about here today. think to reduce our reliance on the chinese communist party and by the way it is not president xi jinping he is chinese communist party chairman xi jinping the word president doesn't exist in the in the nomenclature it implies that he was

thank you

selected by his people and he was not so let's remember what we're dealing with and i think to your point an an axis of dictators and aggressors that are are coordinating there i think we find ourselves today the dynamic is mutually assured disruption we've spent the last two years mapping out each other's weaknesses and deficiencies and now we're racing here in the united states and i think in a bipartisan way to reduce our reliance on those core chinese uh supply chains and inputs but the chinese are working to cement those very dependencies because of the power it provides them my big my biggest concern next week is um continuous

very good thank you

delays to taiwan arms packages because that's the the one deliverable that the chinese want more than anything

very big one point eight billion dollars mister orin kash

uh thank you i think it's it's a it's a wonderful way of framing the the situation that we're in, uh, I would say we need to be extraordinarily hawkish, but that we have to understand that in this context, dove to hawk doesn't mean how excited we are to start a war, it means to what extent are we optimistic or pessimistic that there can be a constructive relationship between the countries. And I think, to your point, going all the way back to Nixon going to China, but especially since the year two thousand, it h should be extremely obvious to us that there is no path to partnership collaboration, mutually beneficial arrangements with China. Uh, at the same time I think it's also very important to recognize that China is in many ways now a pure adversary. We don't get to dictate the terms. I think we need to be realist, that they are going to have their sphere of influence, they are going to proceed how they want to proceed. We need to be sure we can proceed how we want to be s- how we want to and be confident that our system will prevail.

Very good. Mister Harrell?

Yeah, so I'm quite hawkish on China. I think the, one of the lessons the last couple of decades is we are not going to change China. They are going to be a strategic competitor and an outright adversary in a number of areas. And so we need to manage this relationship to, as as Mister Singleton says, slow them down, speed us up. And then I would add the third topic we've all been talking about, which is reduce our reliance on them and reduce the leverage they have uh over us. while managing tensions in the relationship. But it's just going to be a pretty hawkish, pretty managed relationship, uh, at least as long as the CCP is in, is in power.

And let's, let's also just emphasize, we gotta treat our friends better because they share our values, and we have to figure out how to bring more friends into our sphere, because right now we're pushing our friends into their sphere. We've gotta be nicer to our friends and bring them in. We still want, you know, fairness and thing, and, and, and for them to treat us properly, but we've gotta be nicer to our friends and bring them into our sphere. That chart that Raj showed showed earlier about uh Canada being more of uh favorably disposed to China than America right now is just blows my mind. Thank you, uh witnesses.

Thank you, Mister Swasey, the chair now recognizes Miss Stephens for five minutes.

Well, thank you uh to the gentlemen from Washington State and to our witnesses for uh today's very important hearing as a matter of fact because as we talk about supply chain uh dependencies import export controls um there are real lives uh behind these policy decisions that we will make trade rules of the road and frankly there are small businesses like the ones that I represent in Michigan in our automotive sector in manufacturing um some of them are multi-generational whose lives are just kinda hanging in the balance um they've got sometimes multi-million dollar pieces of equipment uh they're looking at mergers and acquisitions they're looking at shrinking uh production value and they are being challenged in this current dynamic. And so there is a reason why as a four term member of Congress, I have dedicated a huge practice of my work to going and spending time with manufacturers. I call it manufacturing Monday in a lot of respects when I'm home. And it's easy to brag, the innovation is profound, the the moonshots of the twenty-first century are still running through the place that I call home in terms of mobility, aerospace, and defense. And yet, our realities have changed. And the great breadth of policy work that every each and every one of you on this panel are responsible for and have contributed to means so much to us, really truly. And if and when you get the opportunity to come to Michigan, call me. cuz I'd love for you to see, you know, automation alley and this rich concentration of start-ups, uh and or legacy, um manufacturers doing incredible work. And look, we can wax, um you know, poetic in some regards, uh as it pertains to the president's current policies and the administration's current policies. It absolutely surprised me as a congresswoman for Michigan. uh, to hear a president who campaigned rigorously in my state say, " We're gonna take on China, uh, we need to take the jobs from Shanghai to Sterling Heights, and then get into office and attack Canada." You know, the rules-based industrial world order has got to be looked squarely in the face by writ of what we are going to look like in the year twenty fifty. We as the United States of America our role in the world, our rules of the order, the congressman from New York talking about who our real allies are. Now China exists. The Chinese Communist Party exists. I- we've said it ad nauseum in this committee, that they got into the WTO and guess what, they never normalized. And by the way, twenty-five years of wars in the Middle East, another war still going on, that hasn't normalized either. There still isn't democracy, and yes, there's only one democracy in the Middle East at this point. So until we, as policy makers, choose to wake up to the global realities coming down on us. Look, I'll - I'll celebrate history to the best of them and recognize it. I had a World War Two veteran, ninety-five years old,

Yeah.

Lithuanian, tied to Ukraine, you know, standing outside my office yesterday. You know, the the Ukraine-Russia war now longer than World War Two. You know, folks within our own borders questioning how we position ourselves, what does freedom mean, what does open free market capitalism that promotes equal opportunity bring, and arrive? Mister Swasey's right. We're in a competition. We all know that. The question is, is how does our freedom continue to ring out so that the tool and die manufacturers from Grand Rapids, Michigan to uh Troy, Michigan continue to stay strong and competitive? And there's a whole suite of things. You guys have probably contributed to books and policy papers that we care deeply about. I got legislation I was supposed to talk to you about, you know, about protecting America, from the Chinese cars stuff. You know, all those little parts component. I I encourage you to check out that bill. It's with Senator Slotkin. I encourage you to check out my other bill, the No Chinese Cars Act. But I really use these poetic five minutes that I got here on this committee hearing for those of us to feel the drumbeat, the pride, the joy, but the eye on the prize, as President Truman once said, that America is not built on fear. America is built on courage, determination, and the willingness to do the job at hand. And so our job is to secure our freedoms, secure the ability of small business owners and manufacturers and workers to succeed. And with that, Mr. Chairman, I yield back.

Thank you, Ms. Stephens. Uh, let me turn to Mr. Carson for another question if they c- If the witnesses would uh be open to that. Mr. Carson.

Thank you so very much, Chairman. You're appreciated. Um, Rolls-Royce just completed a one billion dollar decade-long investment in the in the Indianapolis campus that employs thirty five hundred Hoosiers. Um, many of them UAW members and building more Rolls-Royce defense engines than any other site in the world. The B-fifty-two, the Army's n- new MV-seventy-five, the V-twenty-two Osprey, uh the Navy's M-Q-twenty-five, Indianapolis is building the engines our war fighters fly. Mister Harrell, engines like these, or any of the panelists, uh engines like these depend on specialty alloys, rare earth magnets, and titanium where China holds significant processing dominance. If we restrict critical inputs for an operation like this because they pose a broader security threat, What happens to production capabilities and the associated jobs? And Mister Singleton and Mister Kass, please weigh in as well.