Jonathan Harman & Lillian Ellis
The People’s Republic of China (PRC) has long sought to make geopolitical competitors dependent on it for materials necessary for national security by oversaturating the market with cheap Chinese products. Using that same strategy, the PRC is now looking to gain a monopoly on legacy chips—less advanced microchips required for both civilian and military technology. To combat this and future Chinese market threats to American national security, Congress should reinstate and modernize Section 421 of the 1974 Trade Act to allow the federal government to evaluate and recommend tariffs to the President for specific Chinese imports.
The PRC has long achieved dominance in international markets by subsidizing strategic industries to overproduce and flood the market with cheap products. Take rare earths as an example. Beginning in the 1980s, cheap Chinese labor and production costs drove out nearly all competing rare earth mines in the United States and abroad. Chinese rare earths now comprise nearly 80 percent of U.S. rare earth imports.
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