Center for American Progress

Reclaiming U.S. Strategy on Chinese Overcapacity and National Security
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Reclaiming U.S. Strategy on Chinese Overcapacity and National Security

The Center for American Progress urges the Office of the U.S. Trade Representative to look beyond narrow trade balances, to partner with allies to address China’s industrial overcapacity, and to protect U.S. national security commitments from economic coercion.

In its submission to the Office of the U.S. Trade Representative (USTR), the Center for American Progress warns that the proposed “board of trade” fails to address the primary strategic threat: Beijing’s heavily subsidized industrial overcapacity aimed at dominating critical global supply chains. CAP emphasizes that countering this challenge requires working alongside international allies to build alternative, non-Chinese manufacturing capacity, rather than relying on unilateral measures focused purely on trade deficits.

While CAP supports targeted tariff relief on nonsensitive goods, it cautions USTR against evaluating relief through a purely bilateral lens. Broad, unilateral tariffs previously triggered severe retaliatory export bans from Beijing on critical minerals and components. Lowering duties for China while keeping heavy tariffs on friendly nations risks further eroding trust with the very allies needed to counter Chinese economic aggression.

Finally, CAP urges the administration not to let trade negotiations compromise core national security policies. Beijing’s economic leverage must not dissuade the United States from enforcing robust export controls or supporting Indo-Pacific allies. The United States must leverage its key strategic strengths—its alliance networks and global financial leadership—to resist economic coercion.

The positions of American Progress, and our policy experts, are independent, and the findings and conclusions presented are those of American Progress alone. American Progress would like to acknowledge the many generous supporters who make our work possible.

Author

Jonathan Fritz

Senior Fellow, China Policy

Department

National Security and International Policy

Advancing progressive national security policies that are grounded in respect for democratic values: accountability, rule of law, and human rights.

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