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Washington, D.C. – At a Senate Foreign Relations hearing on tariffs and U.S. foreign policy today, U.S. Senator Marco Rubio (R-FL) raised the economic threat posed by China and the need to work with our allies to confront China’s unfair trade practices.
 
Last month, Rubio urged President Trump to re-consider the deal lifting the ZTE ban, and to support the Senate-passed ban on government purchases of ZTE and Huawei equipment. Rubio also worked to include a bipartisan ZTE amendment to the pending National Defense Authorization Act for Fiscal Year 2019 that the Senate passed in an 85-10 vote.
 
A video of the exchange is available here. A rough and partial transcript of the exchange is below:
 
Rubio: There’s been a general consensus in American politics, in American debate, about the value of the global economic order, the rules-based trading system. And I do think while this is a committee that focuses on foreign policy, that it is difficult to ignore that while free and open global trade has incredible benefits, it does have downsides. There are losers to trade, even agreements that are great. And not enough attention has been paid to the fact that people have been displaced over 20 or 30, 40 years. And that has created some of the domestic blowback against some of the trade.
 
That said, by and large, America is generally a winner, particularly when we are interacting with countries who follow the rules. And that’s where these dispute resolution mechanism exist and you have a hope that they would work when these countries also happen to be geopolitical allies with whom we partner with on a host of other issues including national security. I think wisdom would say that, particularly when we talk about the 232 actions and whether it’s our partners in the EU, Mexico, Canada, and other places, these are ultimately allies and countries that we do have issues that need to be addressed. But we can work with them. We believe we can because ultimately none of these nations seek to displace the United States or undermine our position in the world. They do want to get better deals but there’s a mechanism in place to address it.
 
Which is why I would’ve stronger preferred for the president and the administration to kind of dealt with those issues second after first focusing on China because many of those countries that we are allies with have deep concerns about China as well, which leads us to the 301 actions.
 
And the threat from China is perhaps without precedent. Senator Risch just mentioned a moment ago “Made in China 2025” that is a key piece of a broader plan to displace the United States on virtually field that will define the 21st century.
 
If they were going to displace us because they work harder, because they’re more innovative, because they just out-hustle us that’s one thing. That just calls on us to work harder and do better. But the way they seek to displace us, through things like the theft of Intellectual Property. Just yesterday, or a couple of days ago, a former employee of Apple was arrested at an airport in California headed to China with a bunch of secrets and Intellectual Property on Apple’s Autonomous Vehicle Technology, every single day brings stories. We’ve all heard the horror stories of the force transfers, if you want to do business in China here is your new partner. And by the way, you need to teach him everything you do so that in a few years when they can do it as well as you can they can kick you out and be your competitor backed by the Chinese government and put you out of business.
 
Unfair practices are just outright denying market access, but demanding unfettered access to our own market. This needs to be addressed. And so there’s a consensus, so there’s a belief in the business community, we should have told China what we were upset about, we should have warned them this is what we’re going to do if you don’t listen. That’s the story of the last twenty years. Our relationship with China economically over the last twenty years has been built on the hope that once they were made richer they would behave more like us. And what they’ve done is they’ve taken all the benefits of that global order, but assumed none of its responsibilities. Leading us to this point.
 
I guess my only question is, I wonder, what role the State Department played or others in advising the administration on a path that would have said: Why don’t we partner with our allies first, so we can all collectively confront China because we are all facing the same challenges. And then secondarily deal with these other issues because of its geopolitical implications.
 
I would be remiss if I didn’t also ask, related to that what role, if any the State Department played in advising the administration on its recent decisions regarding ZTE. Because while I would say to you that the penalties imposed on ZTE for violating sanctions are severe for purposes of sanctions violation our issued with ZTE they extend well beyond sanctions violation. Any telecommunication company in China is controlled by the Chinese government whether they want to be or not, and allowing them to embed themselves in the commercial infrastructure of the United States poses a significant national security threat and there is an irony that while we are out imposing tariffs for national security on partner countries with whom we have national security arrangements, we are allowing a foreign telecommunication operator to stay in business with our parts knowing the threat they pose to our national security. So, did the State Department have any role in advising from a geopolitical perspective and focusing on China first and what role did the State Department play, if any, in the decision on ZTE?      
 
Assistant Secretary Manisha Singh: Thank you Senator. Both of those are very important questions, the State Department has played and continues to play a role in advising the President on working with our allies to counter China. I previously indicated that in all of my travels, the senior leadership of the State Department, whether it’s the Deputy Secretary or Secretary Pompeo himself  who as you may know is on a tour of several countries right now, we have explicitly provided input to the White House and said we need to work with our allies specifically to counter China. We need their buy-in. Because the only way to have success against China is to isolate them. China needs to be clear that it is a threat to the global economic community. And if our allies agree with us then we can isolate China and force it to change its behavior.
 
On your question regarding ZTE, the State Department did play a role and we advocated the stiffest penalties possible against ZTE.