Hoosier State Today

Around the world, autocratic states like China and Russia are using heavy-handed economic coercion to intimidate smaller countries and economies to get their way. As senators from both parties, we think we need to act to strengthen our nation’s ability to step up to this challenge.

At the recent G-7 meeting in Japan, President Biden and the other leaders of the world’s largest democratic countries and economies agreed to launch a new Coordination Platform on Economic Coercion to strengthen information sharing and collaboration, as well as to build new tools to deter and counter economic coercion. That’s why we hope to move forward with our bill, the Countering Economic Coercion Act, to enable a forceful response to coercive actions in concert with our like-minded partners overseas. 

There are many examples of economic coercion just in the past few years. To punish Lithuania for allowing Taiwan to open a representative office in Vilnius, China unleashed an economic broadside against the Baltic state, blocking bilateral trade and blacklisting Lithuanian products in international markets. Russia weaponized its integration in European energy markets to try to force Western governments to back down from their support of Ukraine. And China responded to Australia’s call for an independent inquiry into the origins of COVID-19 by disrupting valuable Australian exports. China is Australia’s top export market, and the pain imposed on a wide range of Australian businesses, farmers and miners was real, as China blocked billions in exports of barley, beef, wine and coal.

In addition to these overt actions, China has made countless other economic threats, leveraging the size of its market to extract political compliance through economic intimidation. This economic coercion can serve as a powerful deterrent: If a smaller economy knows it will get walloped with one of China’s economic hammers, it is much less likely to take any action that might irritate Beijing. By using economic hammers to threaten, bully and bludgeon, China exploits economic interdependence to impose its will on the world and influence the sovereign political decisions of democratic states. 

Of course, the United States uses economic sanctions to protect our own interests and discipline malign actors overseas. However, our actions are transparent, open to legal scrutiny and grounded in international norms. When China or Russia carry out threats of economic coercion, they act without accountability or transparency, and they undermine international rules meant to protect the defenseless. Because their actions are often informal and opaque, existing international mechanisms cannot respond rapidly or effectively.

The United States has stood by its allies when they have come under economic attack, but we need to update our policy toolkit so that we can respond more forcefully and more quickly. That is why we introduced our bipartisan and bicameral Countering Economic Coercion Act, which would give the executive branch more tools to support our allies when they are subject to economic bullying — and to punish the countries carrying out this malign behavior. 

Our bill would allow the president to act quickly by temporarily decreasing duties on certain imports from targeted countries and offering the U.S. market as an alternative when China shuts down trade. The bill also allows the executive branch to speed up regulatory processes to facilitate rapid export financing, import approvals, and other trade, aid and investment assistance.

A quick response to support our allies helps ease their economic pain and gives time for supply chains to shift, private markets to adjust and new investors to step in. This is important because China often targets economic disruption where it will be most painful, including perishable produce or other products with a short shelf life. By supplanting China as a trading partner for targeted countries, we can also create new opportunities for U.S. businesses, workers and consumers. 

By offering mechanisms to support targeted countries, we expect our bill will serve as a deterrent: if China and Russia know we stand ready to assist any foreign partner targeted with economic coercion, they will be less likely to attempt economic aggression. Further, our bill would allow the president to increase duties on imports from the country carrying out economic coercion. Forcing China and Russia to pay an economic price for beating up on vulnerable economies will enhance the deterrent effect and help protect our allies.

As our colleagues in Congress consider this legislation, most of our G-7 allies are considering similar laws that would allow them to respond more forcefully to economic coercion as well. This is a good thing — the more unified we are with like-minded democratic allies in responding to anti-democratic bullying and intimidation, the more successful we will be.

In an increasingly competitive world with rising authoritarian threats, this is what U.S. leadership must look like. By demonstrating our commitment to our allies, deepening our economic integration with reliable trading partners and building democratic coalitions, we can face down authoritarian bullying and build a better, freer world.

Sen. Chris Coons is the Democratic junior senator from Delaware. 

Sen. Todd Young is the Republican senior senator from Indiana.

Coons and Young serve on the Senate Foreign Relations Committee. They are sponsors of the Countering Economic Coercion Act.

Original source can be found here