China

AI is a general-purpose technology with tremendous promise. But U.S. AI leadership and adoption is by no means assured, because there is intense international competition.

This Section 301 investigation rightly focuses on structural excess capacity. But its scope encompasses 16 economies rather than narrowly addressing the core cause of global trade upheaval—China’s mercantilism—thereby risking dilution of the blame for the country responsible for causing the need to recalibrate the global system.

China should come into full and immediate compliance with its WTO commitments; otherwise, as a last resort, the U.S. government should revoke China’s PNTR status. But policymakers should mitigate second-order effects, particularly on national power industries.

Sales of Chinese hybrids and plug-in hybrids in Europe increased by a factor of 14 between August 2024 and August 2025

Countries in the Global South are key markets for Chinese and U.S.-allied national power industries, which require scale economies to flourish. U.S. policymakers should stop viewing them as a “backyard” and recognize that they are a key battlefield in an industrial war.

Boosting U.S. competitiveness in national power industries is necessary, but not sufficient to avoid losing to China. America also must take measures to slow the PRC’s progress toward global dominance. This report provides more than 100 actionable recommendations for the administration and Congress. Western allies should take many of the same steps.

A select group of advanced, globally traded industries serves as the bedrock of U.S. technological leadership, economic power, and national security. Policymakers need to closely monitor the relative strength and vulnerability of its production capabilities.

Congress is right to flag Alipay over national security and data risks, but a blanket ban without first conducting audits or establishing reciprocity safeguards would be premature. Regulators should investigate the platform before Congress considers banning it.

Advanced manufacturers based in East Asia are expanding investment into the U.S. economy. Yet, many of their internal value chains remain anchored in China, giving the PRC significant leverage over U.S. interests. U.S. policymakers should respond both defensively and offensively.

If the USTR is serious about protecting U.S. consumers and businesses from copyright piracy and trademark counterfeiting, it should designate Chinese online platforms Temu, AliExpress, and SHEIN as notorious markets.