More than a year after launching its brutal war in Ukraine, Russia is now facing an ammunition shortage making it “increasingly challenging for them to sustain even modest offensive operations,” America’s top intelligence official told lawmakers Thursday. Meanwhile, Russian President Vladimir Putin likely has “scaled back his immediate ambitions” in Ukraine, aiming now to strengthen his grip on occupied territory in the east and south, instead of a total takeover, she added.
Director of National Intelligence Avril Haines’ update on Russia came during a hearing of the Senate Armed Services Committee Thursday in which she shared views on other threats around the world, including an increasingly aggressive China. Her comments came as lawmakers are considering a new effort to strengthen America’s global competitiveness (more on that later) and as they debate the future of Ukraine aid.
The war there has had a high cost. Earlier this week, the White House estimated more than 20,000 Russian troops have been killed in Ukraine since December, and 80,000 others wounded. The White House didn’t release an official estimate of Ukrainian casualties.
Ukraine faces challenges, too: American officials have predicted Ukrainian forces could deplete air defense munitions by the end of May, according to leaked Pentagon documents. As the Morning Dispatch team wrote earlier this week, Ukraine appears ready to launch a spring counteroffensive soon to retake occupied territory and push back the battlelines. (Read more here.)
During the hearing, Haines also emphasized the threat posed by China.
The Chinese government is “increasingly challenging the United States economically, technologically, politically, militarily, and from an intelligence standpoint around the world,” Haines said. It’s also pursuing space weapons capable of targeting American satellites and boosting its own nuclear arsenal.
Chinese leaders are convinced their country will become a global leader only if they can undercut the U.S. and portray it as “the root of global problems,” Haines told senators.
She also faced questions from senators about America’s 2021 withdrawal from Afghanistan. Nebraska GOP Sen. Deb Fischer asked about the U.S. intelligence community’s capabilities in the aftermath of the chaotic withdrawal.
Lawmakers have reason to worry. The leaked Pentagon documents recently revealed the Islamic State is relying on Afghanistan, now held by the Taliban, as a staging ground for planning attacks around the world. As of February, Pentagon officials knew of Afghanistan-based ISIS leaders’ plans for 15 terror attacks, including efforts to target embassies, churches, business centers, and last summer’s FIFA World Cup, according to the Washington Post.
“We are not able to collect as much information today as we were, obviously, when the troops were in Afghanistan,” Haines said Thursday. Intelligence gathering in Afghanistan is “definitely, as you indicated, degraded from what we had previously.”
Lawmakers Take Another Stab at China Competition
Remember last year’s CHIPS Act, the sweeping bill aimed at out-competing China? Senate Democrats want to pass another one, including measures that didn’t make it into last year’s bill.
Senate Majority Leader Chuck Schumer said he wants to move the legislation “within the next several months” and has directed Democratic committee chairs to work with their Republican counterparts on it in the coming weeks. The effort will seek to limit the flow of advanced technology to China, place more guardrails on American business in China, and expand America’s influence around the world by investing in allies’ needs.
The package could be one of the few areas on which Republicans and Democrats find consensus in this divided Congress—but there are still some stark differences between what the two parties want to see in such a bill. And unrelated partisan clashes could derail the negotiations as they threatened to last summer.
Senators will try to include language laying out the sanctions China would face if it were to attack Taiwan—an attempt to deter Chinese leaders from such aggression. They’ll also want to follow up on the U.S. government’s most significant response to China’s genocide in the northwest region of Xinjiang to date: the Uyghur Forced Labor Prevention Act. Sen. Jeff Merkley, co-chair of the Congressional-Executive Commission on China, said Wednesday he wants to strengthen enforcement of the law as part of the package. He is also advocating a bill to tackle China’s repression of diaspora communities and dissidents around the world. (Read our coverage of that legislation here.)
Senate Democrats’ desires to direct money to U.S. diplomatic programs and finance development abroad may face the most GOP pushback since Republicans are aiming to cut government spending.
“It would be challenging, and partly because of spending and debt—concerns about too much spending and the impact it’s had on inflation, the way the deficits exploded and ballooned,” Sen. John Thune, the chamber’s second-ranking Republican, told reporters.
House Republicans, meanwhile, are viewing the upcoming annual defense authorization package as a primary vehicle for Taiwan and China-related bills. The new select committee on competition with the Chinese Communist Party is expected to offer a slate of recommendations for Congress, many of them related to the issues Senate Democrats want to include in the new competition package. How they ultimately move through Congress is up in the air.
Speaking of that select committee …
China Select Committee Probes Companies, Targets Trade Benefits
Legislation sometimes has unintended consequences.
In 2015, lawmakers hoped to help e-commerce, shipping companies, and small businesses by exempting more packages from duties and Customs and Border Protection processing when entering the United States. Under the law, shipments valued below $800 enjoy expedited entry, and consumers enjoy lower prices. Since the change passed, major Chinese brands have fully embraced the exception, known as “de minimis.”
Fast fashion retailers like Shein—companies that quickly mass produce cheap, trendy fashion products—send small shipments directly to consumers in the United States under the de minimis threshold. But some of those companies, including Shein, have been tied to forced labor. Seeking to block products made with forced labor from entering the country, lawmakers of both parties are increasingly questioning the trade benefit, with some pushing to end it for Chinese shipments altogether.
After hearing about the Chinese government’s genocide in Xinjiang in March, the high-profile select committee on competition with the Chinese Communist Party sent four letters this week demanding answers from businesses implicated in forced labor and that rely on de minimis shipments. The committee is building a case for significantly changing how the exception works for shipments from China, with various legislative options under consideration, one source familiar with the panel’s work confirmed.
Even Republicans who have typically been more reluctant to criticize the policy are using harsh language for it: The select committee’s GOP communications team issued a statement this week that described the de minimis threshold as a loophole.
“American companies can’t be expected to compete against foreign firms who turn a blind eye to forced labor and dodge our import taxes,” Rep. Mike Gallagher, who chairs the panel, said this week. “Shein isn’t exactly some struggling startup. It’s now the largest fast fashion company in the United States.”
Rep. Earl Blumenauer, an Oregon Democrat, worked last year to scrap the de minimis threshold for Chinese shipments as part of the House’s version of a China competition package. It failed to pass in the final law. Members may renew the effort as Democrats try to pull together a new competition bill, but they will probably face lobbying campaigns from business groups opposed to changes to the de minimis threshold, as happened in late 2021 and into 2022.
The lobbying campaign hasn’t totally scared off lawmakers, though: A bipartisan group of senators raised questions about de minimis standards and forced labor in a letter to Shein’s CEO earlier this year. The select committee’s letters this week show congressional momentum for action is only growing.
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