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• U.S. Department of State

Summary

U.S.-China economic ties have expanded substantially over the past several years. Total U.S.-China trade, which totaled only $5 billion in 1980, rose to $343 billion in 2006. China is also now the 2nd largest U.S. trading partner, its 2nd largest source of U.S. imports, and its 4th largest export market. With a huge population and a rapidly expanding economy, China is a potentially huge market for U.S. exporters. However, economic relations have become strained over a number of issues, including China's large and growing trade surpluses with the United States; its failure to fully implement its World Trade Organization (WTO)commitments (especially in regards to protection of intellectual property rights), its refusal to adopt a floating currency system, its use of industrial policies and other practices deemed unfair and/or harmful to various U.S. economic sectors, and its failure to halt exports of unsafe food and consumer products to the United States. The Bush Administration has come under increasing pressure from Congress to take a more aggressive stance against various Chinese economic and trade practices. It has recently filed a number of trade dispute resolution cases against China in the WTO, including over China's failure to protect IPR and afford market access for IPR-related products, discriminatory regulations on imported auto parts, and import and export subsidies to various industries in China. In addition, the Administration recently reversed a long-standing policy that countervailing cases (dealing with government subsidies) could not be brought against non-market economies (such as China) when it brought against certain imported Chinese glossy paper products. In December 2006, the Administration began a "Strategic Economic Dialogue" (SED) with China to discuss major long-term economic issues between the two countries; the latest SED talks were held in May 2007. In response to growing concerns in the U.S. over the health, safety, and quality of certain Chinese products (such as seafood, pet food, toothpaste, tires, and toys), the Administration announced in August 2007 that it has begun negotiations with Chinese officials to reach new agreements (by December 2007) on the safety of food and feed and of drugs and medical devices. Numerous bills have been introduced in Congress that would impact U.S.-China economic relations. H.R. 321, H.R. 782, H.R. 1002, H.R. 2942, S. 364, S. 796, S. 1607, and S. 1677 seek to address China's currency policy. H.R. 388 would prohibit U.S. imports of Chinese autos as long as Chinese tariffs on autos are higher than U.S. tariffs. H.R. 708, H.R. 1229, and S. 974 would apply U.S. countervailing laws to non-market economies. H.R. 571 would raise tariffs on countries classified as nonmarket economies. H.R. 1958 and S. 571 would terminate China's permanent normal trade relations status. H.R. 275 would prohibit U.S. companies from aiding regimes that restrict Internet access. S. 1919 would limit the president's discretion on Section 421 investigations on import surges from China. H.R. 3273 would expand U.S. export promotion programs to boost exports to China. Finally, concerns over the health and safety of Chinese products have generated numerous bills. This report examines major U.S.-China trade issues and will be updated as events warrant.

Related Legislation:
• H.R.321
• H.R.782
• H.R.1002
• H.R.2942
• S.364
• S.796
• S.1607
• S.1677
• H.R.388
• H.R.708
• H.R.1229
• S.974
• H.R.571
• H.R.1958
• S.571
• H.R.275
• S.1919
• H.R.3273
• S.2
• S.4

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