Tensions between the United States and China have increased markedly in recent years, ushering in possible implications for both long-term national security and everyday commerce. As a first step in navigating potential and actual responses to this situation, affected companies are advised to consider the delicate interplay of the United States’ three coequal branches of government, as each branch plays a unique role in the process of developing policy, laws, and regulations.
American foreign policymaking runs at different speeds depending on who in the US government is taking action. The executive branch has the greatest degree of flexibility and agility given that the US president is able to issue executive orders (EOs) without the oversight or approval of US Congress or the courts. However, the legislative branch acts with more certainty and controls the purse strings—a key element to any effective action by the executive branch.
That being said, while the president can issue EOs, regulations, and policies and declare suspension of a previous administration’s actions with little interference, Congress has the ability to modify such decisions. Legislators can do so by narrowing executive branch orders or policies, enhancing their provisions, or requiring reporting of actions under those authorities, thereby creating transparency into the executive branch’s actions.
Interagency dynamics, including by oversight or review committees, broaden the challenge for those seeking to monitor decision-making. Key decision-making areas include the following:
Other US government regulatory agencies of note include the following:
Congressional authority resides in multiple standing and ancillary committees. While often slow to act, the legislative branch can pass influential laws and resolutions affecting international commerce. Through the appropriations process, it also retains the power of the purse. The branch also conducts frequent oversight through special bodies such as the US-China Economic and Security Review Commission.
Of crucial import on both sides of Capitol Hill are the Armed Services Committees, which are deeply involved in sculpting the contours of the National Defense Authorization Act. Also in play are the House Ways and Means Committee and the Senate Finance Committee, which reach into both trade and multinational commerce.
Each chamber’s intelligence committees, while relatively opaque due to the classification of data, are worth closely monitoring, not least because they have authority to review sensitive executive branch intel.
The third leg of the national security “stool” is the judicial branch, which is charged with interpreting laws passed by Congress and implemented by the executive branch. Although courts historically have been deferential to the executive branch, a potentially tectonic change might be on the horizon.
The US Supreme Court recently agreed to review the so-called Chevron Doctrine, which has ensconced a presumption of deference to the executive branch for at least four decades. Should the doctrine be overturned or modified, it could weaken agencies’ autonomy and relocate relevant powers of review to other parts of the government.
Any survey of the current US-China relationship benefits greatly from an understanding that the engagement has seen more than 70 years of evolution. From embargoes in the 1950s, to a rapprochement between the two countries during the 1970s, to US concerns today about semiconductors, quantum technology, biotechnology, and more, traversing the landscape has understandably entailed changes.
More broadly, the Indo-Pacific theater is increasingly fraught, and the United States has determined that it must enlist cooperation—from the Netherlands and Australia to Japan and perhaps India—for any new sanctions or other policy shifts.
From a geostrategic standpoint, Taiwan presents a complex and perplexing challenge. The enhanced tensions between the United States and China, as well as the spillover effect of that tension on the engagements among the United States, its partners, and allies, as well as those parties and China, has created ripple effects globally.
Taiwan remains a flashpoint in part because it houses the world’s key advanced semiconductor manufacturing capability as well as a key strategic location in East Asia. Exacerbating this situation is the current inconsistent statements from the US president and his cabinet-level secretaries regarding the US position on Taiwan.
Should this continue, China could choose to react, and that reaction could include, as has been mentioned by the US intelligence community and members of US Congress, actions by China toward Taiwan. At a minimum, there will likely be countermeasures or countersanctions in retaliation for any US or allied/partner action in relation to Taiwan.
Meanwhile, on the US domestic front, other considerations have been developing. The interaction between CFIUS and the CHIPS Act, among other interactions, would appear to suggest a revival of US industrial policy. And that is potentially bolstered by an extremely rare display of bipartisanship.
Formed at the beginning of the new session of Congress in early 2023, the US House Select Committee on Strategic Competition between the United States and the Chinese Communist Party (Select Committee) could prove to be a potent force. Bipartisan majorities share a view of China as both competitor and adversary.
As a result, Republican and Democrat committee members alike have indicated that Congress may become increasingly engaged, particularly on questions of commercial competition oversight or restrictions on access to key technologies.
In summary, the US-China relationship finds itself facing many inflection points. Regulation of international technological commerce, profound apprehension about national security, and geostrategic military questions all loom. What’s more, human rights concerns form a backdrop that is a constant source of friction.
If you are interested in The 118th US Congress and the Select Committee, as part of our Continuing Evolution of US-China Relations: 2023 and Beyond, we invite you to subscribe to Morgan Lewis publications to receive updates on trends, legal developments, and other relevant areas.