Outrage Over Chinese Balloon Spills Into US Economic Policy

February 7, 2023 by Tom Ramstack
Outrage Over Chinese Balloon Spills Into US Economic Policy
In this photo provided by Brian Branch, a large balloon drifts above the Kingstown, N.C., area, with an airplane and its contrail seen below it. (Brian Branch via AP)

WASHINGTON — A congressional financial committee on Tuesday started talking about how to improve economic competitiveness with China but quickly shifted to join outcries against the spy balloon that traversed the United States last week.

The balloon served as an example of how trade competition with China is really a national security issue, according to lawmakers and trade experts at the House Financial Services Committee hearing.

“The actions of the Chinese Communist Party last week serve as a clarifying moment,” said Rep. Patrick McHenry, R-N.C., the committee’s chairman.

While Financial Services Committee members discussed options for economic sanctions against China and reducing the $382 billion trade deficit last year, the Senate and the Biden administration discussed other repercussions.

The 200-foot-tall balloon entered the United States over Alaska on Jan. 28 but maneuvered over military sites throughout the U.S. midsection until it was shot down by the Air Force off the coast of North Carolina on Saturday.

The Chinese government claims it was a civilian weather balloon that inadvertently wandered off course. The U.S. government says it appears to be a spy balloon that carried data-gathering equipment nearly the size of three school buses.

Another balloon was detected over Latin America about the same time, which China again claimed was a civilian balloon.

Senate Republicans said a first target of retribution should be the video app TikTok. They recommend a ban on the app that has more than 100 million monthly active U.S. users.

TikTok, which is owned by the Chinese company ByteDance, revealed late last year that the app has been downloaded about 2 billion times globally.

Its U.S. critics say TikTok also could be used by China to spy on Americans, similar to the surveillance balloon. The Chinese government is a silent partner to most of its major corporations.

“A big Chinese balloon in the sky and millions of Chinese TikTok balloons on our phones. Let’s shut them all down,” Sen. Mitt Romney, R-Utah, wrote in a Twitter message.

“Now blow up TikTok,” tweeted Rep. Matt Gaetz, R-Fla., in reference to the air-to-air missile from a U.S. fighter jet that shot down the balloon.

President Joe Biden was more subdued in his response.

He continued to say shooting down the balloon was the right decision but doubted the confrontation would significantly weaken relations with China.

“We did the right thing and it’s not a question of weakening or strengthening,” Biden said during a press conference outside the White House Monday. “It’s reality.”

He was joined in downplaying the risk of greater hostilities by Siva Yam, president of the Chicago, Illinois-based U.S.-China Chamber of Commerce.

“I don’t think you’re going to see much change,” Yam told The Well News.

For issues related directly to national security, the U.S. government is likely to “scrutinize further,” Yam said. “For basic manufacturing, I don’t think you’ll see much impact.”

Sales of consumer goods and electronics from China on e-commerce sites like Amazon, eBay and Alibaba also are likely to remain the same, he said.

Lawmakers and economists who testified before the House Financial Services Committee were less conciliatory in their assessment of the balloon incident. They said the national security implications demonstrate China should not be allowed to gain an economic advantage that could be used to strengthen its military.

“In addition to funding their military, China continues to use its economy to oppress its own people,” said Rep. Blaine Luetkemeyer, R-Mo. “We lack meaningful action as we just witnessed last week with the balloon fiasco.”

Clete Willems, an attorney and international trade advisor to the Trump administration, said, “The outcome of this competition will affect the future of our country and the world we live in.”

Tom can be reached at [email protected] and @TomRamstack

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