Congress is poised to restrict purchases of Chinese-built buses and rail cars in legislation that could open a new front in the trade war alongside the Trump administration’s squabbles with Beijing.
A bill would forbid the use of federal grants, which the Department of Transportation often makes to big-city transit authorities, to buy new subway trains or buses from the Chinese-owned manufacturer CRRC.
Robert Puentes, president of the Eno Center for Transportation, a nonpartisan transportation think tank, says CRRC already dominates the market for rail cars in China — “and they intend to corner the global market here in United States.”
Puentes says the company has successfully won bids for transit agencies in Boston, Chicago, Los Angeles and Philadelphia “by adhering to the rules that these agencies and these cities have laid out.”
CRRC has built two American plants, one in Massachusetts and one in Illinois, where it assembles the rail cars.
The shells are imported from China; other parts are made in the United States.
Puentes says there are no American-owned companies that make these kinds of commuter rail cars, although there are U.S. firms that make freight cars.
Other transit systems rely on other foreign-based manufacturers. Washington, D.C.’s rail transit authority, for example, is buying cars assembled in the United States by a division of the Japanese manufacturer Kawasaki.
Rep. Harley Rouda, D-Calif., is chief sponsor of legislation that would ban the transit systems from using federal money to buy the Chinese rail cars. He tells NPR the U.S. should not be supporting a company subsidized by the Chinese government.
“We think it’s important that American taxpayers’ hard-earned dollars and the money that they have provided to the federal government not go to support Chinese companies bent on undermining industries that are important to our national security.”
Rouda says the legislation would not affect existing contracts between U.S. transit agencies and CRCC. And he says that aside from the economic implications, there are important national security concerns.
“Just think for a minute that if you ever ended up in hostilities with a country that controlled those railways and those bus systems, what the economic impact in the national security threat it would cause to a country such as the United States.”
Chinese builder: Nothing sinister here
Not so, says Lydia Rivera, a spokeswoman for CRRC’s Massachusetts-based division.
“Those are exaggerated statements,” she says.
Worries that China might use the rail cars it builds to spy on Americans or hack their data “are unfounded concerns, unfortunately, by lobbyists. None of the so-called ‘at-risk’ systems on our rail cars pose a threat.”
Backers of the ban include U.S. freight car manufacturers, who worry the Chinese will target their business next. Rivera says that’s not going to happen.
“We have no interest in the freight industry. It is not lucrative for us, and we will not be going to the freight industry.”
Rivera says a ban on the use of federal funds could mean the loss of 185 jobs at the Massachusetts factory.
Puentes, of the Eno Center, believes the national security concerns over the Chinese-built rail cars are a bit overstated.
“There is a long and steady supply chain,” he says. “There’s a long, long and lengthy review process. There is oversight by the transit agencies. So some of that, I think, is being overblown when it comes to national security. But the economic security concerns are something we do have to deal with.”
Puentes called the proposed ban part of the larger set of policy concerns between the U.S. and China, which include the trade war, along with cybersecurity and economic security issues.
“We have to understand that it really is highly nuanced and it’s not as simple, I think, as some are making it out to be.”
The provision banning use of federal funds on Chinese rail cars is part of the House defense authorization bill.
A similar provision, also including a ban on spending on Chinese bus manufacturers, is part of the Senate-passed measure. Rouda says he thinks the differences between the two chambers’ legislation should be resolved quickly.