CHINA CARVED OUT: Several measures supported by members of both parties that would crack down on China won’t be included in the National Defense Authorization Act up for a vote this week, according to compromise text released Saturday afternoon. The snubs include measures to reform the de minimis trade policy that allows duty-free entry of small packages, another that would restrict the flow of U.S. capital into China, and a measure to halt federal contracts for companies partnering with specific Chinese biotech companies, referred to as the BIOSECURE Act. The exclusion of the measures is a significant blow to their chances in the short term, and a disappointment to China hawks who had hoped lawmakers were nearing a compromise. It’s also a letdown for House Speaker Mike Johnson (R-La.), who suggested plans to send the White House a China-focused package that includes all three measures by the end of 2024 in a speech at the Hudson Institute over the summer. At this point, staffers say that’s unlikely. “It is undoubtedly a tough road ahead for all three [measures],” said one person close to discussions, granted anonymity to discuss ongoing negotiations. “There is a bipartisan deal to be had on China issues, even if more modest than initially thought. The political costs of not being willing to deal in this area are too great, so the parties are motivated,” they said. De minimis in flux: Negotiations over how to reform the so-called loophole have failed to make serious headway in recent weeks, said the person familiar, and another Democratic staffer close to the process. Competing versions released in both chambers range from cutting out adversaries from de minimis treatment to restricting whole sectors, to taking a firm-by-firm approach, outlined in a bill from Sens. Marsha Blackburn (R-Tenn.) and Jon Ossoff (D-Ga.) released on Thursday. Lawmakers remain in discussions to include all three China-focused measures on a continuing resolution that will fund the government until Republicans take over next year. And Johnson signaled in remarks to Morning Trade that the end-of-year target hasn’t changed. "During the course of negotiations on the annual defense bill, significant progress was made towards achieving consensus on provisions to counter China and strengthen our economic security,” Johnson said in a statement. “That momentum remains and more time is needed to get that important work done with the goal of passage before the end of the year.” But Democratic staffers are voicing frustration over the pace and perceived commitment of their GOP counterparts over China-focused measures. Some Republican lawmakers are stalling negotiations ahead of their GOP governing trifecta next year, they say. The Democratic staffer also told Morning Trade the election results have “emboldened [Republicans] away from making a deal.” They said certain GOP lawmakers now believe “there’s no need to negotiate,” despite their narrow majority in the lower chamber.
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