June 12, 2019

Curtis Ellis: China’s Bid to Control America’s Energy Resources

That’s the classic formula for communist revolution: take control of factories, farms, and natural resources; cripple the economy; seize state power.

Red revolutionaries followed that plan in nation after nation, from Czarist Russia to Somoza’s Nicaragua.

China’s communist regime is using the same strategy in its bid to take over the world.

Rather than an “armed proletariat,” Beijing is deploying predatory trade practices to seize control of the means of production on a global scale.

China uses government subsidies, cyber-espionage and stolen technology to give its state-controlled companies the ability to dump products on world markets at prices below the cost of production and drive competitors into bankruptcy and extinction.

It has run that play in industry after industry, from steel, aluminum and telecommunications to space launch and infrastructure construction.

Once the competition is eliminated, China owns the market – and the means of production to fill the market.

Now, China has set its sights on controlling America’s energy industry.

Don’t expect to see Peoples Liberation Army troops occupying the Permian Basin oil fields of West Texas or the Bakken fields in North Dakota.

Instead, China seeks to control the means by which American oil and gas is pulled from the ground.

Just as they dumped steel and aluminum, drywall and PC plastic pipe, the Chinese have been dumping drilling equipment in the U.S. at prices so low American manufacturers can’t compete.

Cheap imports from Chinese producers have taken over the market for the couplings used to connect pipes in oil and gas drilling.

In three years, Chinese imports doubled. This import surge, far higher than imports from any other source, has crippled American manufacturers and destroyed thousands of good-paying American jobs.

And it’s not just low-end pipe fixtures. Chinese imports now target the higher-end market for more specialized equipment.

The supply chain crucial to American energy dominance is made up of scores of small, independent family-run businesses, and thousands of jobs. All of this is at risk

The Trump administration imposed tariffs on some Chinese oil drilling products, but even after the tariffs they are cheaper. Chinese finished couplings are being sold at prices lower than the cost of the raw steel that goes into them.

China circumvents the tariffs by transshipping their goods through India, South Korea and other countries. Imports of Indian and Korean couplings made from Chinese steel have increased threefold over the last two years.

The Trump administration imposed global tariffs on steel and aluminum imports because of China’s transshipment of metals to third countries. Tougher penalties on Chinese couplings and couplings produced in other countries with Chinese steel are in order.

China is out to cripple our domestic oil drilling equipment industry the same way it has driven so many of our other industries to the brink of extinction.

If it succeeds, China will have veto power over the energy essential to America’s economy and national security.

We can’t let that happen.

Curtis Ellis is Policy Director with America First Policies. He was a senior policy advisor with the Donald J. Trump campaign.

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