ExclusiveUSMCA Closing China Trade Loophole? | China in Focus

Welcome to China In Focus. I'm Tiffany Meyer. Our top story. July 1st is the deadline for USMCA, a $2 trillion trade deal of North America Continental, and President Trump says he's not sure he wants it. What's the crux of the issue? Ohio has canceled more than $20 million in tax incentives for a Chinese battery component company after it failed to deliver on its promises. More on what happened. America's AI race with China is heating up, while the US is lifting an export ban on some of its most powerful AI models. July 1st marks the anniversary of the founding of the Chinese Communist Party outside China. It's also observed by anti-communist Chinese as global quit the CCP day. We take a look at how they're marking the occasion. In Beijing, stepping up its global clampdown, a new law allows the communist regime to target people abroad. The USMCA, the trade pact linking the US, Mexico and Canada, hits its first mandatory joint review. Trade officials from the three countries held a virtual meeting on Wednesday. Washington has formally declined to sign on for a 16-year extension. The Trump administration is pushing for aggressive amendments with two major goals on the table. First, cars. The US wants more automotive parts made at home. Under the new proposal, a vehicle must contain at least 50% US-made parts to qualify for duty-free status. On top of that, the overall North American content requirement would jump from 75% to over 82%. Second, it's shutting down China's backdoor into the US market. US Trade Representative Jameson Greer is demanding that Mexico and Canada align on expert controls and investment limits in order to stop Chinese companies from using Mexico or Canada as a loophole to dodge US tariffs. I would rather not have the agreement, but I may sign it, but we do better as a country if we don't have an agreement. United States does much better. We don't need anything that Canada has, we don't need anything that Mexico has, but they need everything that we have. And they have to treat us better. Mexico's president has already signed a letter for a 16-year extension and wants to continue talks. And in that formal review process, it would be assessed whether any adjustments need to be made to the current treaty. Canada is also pushing for an extension, but it is open to making improvements. Meanwhile, Ottawa is asking Washington to drop recent tariffs on Canadian steel, autos and lumber. It's not a surprise that the United States initiated these investigations. We have made submissions to the United States that we think are very significant in addressing the concerns. But the USMCA trade deal doesn't die. It triggers annual reviews with a hard expiration date in 2036. US Trade Representative Greer is scheduled to head to Mexico City later this month for the first round of face-to-face negotiations. The issues include auto rules of origin, energy reforms and Chinese investment flooding into Mexican factories. With Canada, dairy market access remains a major sticking point, plus Washington's additional tariffs on Canadian steel, autos and lumber. An official timeline for US-Canada negotiations has not yet been set. A more than $20 million state tax incentive cancelled after a promise goes unfulfilled. Ohio cancelled the tax incentives for a Chinese battery component company called Semacorp last month. Four years ago, the company promised it would invest over $900 million to set up a manufacturing facility in Ohio. And the project would create nearly 1,200 jobs by 2027. The factory will make separator film, a key material used in electric vehicles. At the time, a local county commissioner said Semacorp's investment was a major win for US businesses, adding that it would help ensure local residents had access to well-paying jobs. But things didn't pan out as expected. Independent journalist Brianna Morello went there to investigate the story. Why is our government allowing Chinese-owned companies to come here to Ohio, bring in foreign workers and then take their profits back to China? It doesn't seem to make any sense, especially when you think about the fact that they're just creating competition for American-owned businesses who are hiring American-only workers. This needs to end. She also found that Semacorp employed very few Americans. So many people allow these Chinese companies, these foreign companies to come into their community and to build up these factories or these businesses. And they come with all these promises. The promises are we're going to bring hundreds and thousands of jobs to your area. And this was good news for them. And it was really discouraging to see that when I was doing my research and speaking to people on the grounds, that there were only about 15, possibly 25 American employees, what I learned at the facility. She said a source told her Semacorp employees no more than 50 people total. The company did not provide Morello with an exact figure and did not immediately respond to NTD's request for comment. The Ohio Department of Development told the Epoch Times that the tax credit is a performance-based incentive. Companies must meet specific commitments before receiving any benefit. Plus, Semacorp never followed through on the agreement, so the credit has been canceled. Before that, local authorities had already relaxed the project's requirements, cutting its job creation target by over 70 percent. Morello said she noticed people were also living on the property. Now, we know based on those that have followed them that they come straight from the airport, and then they bring them straight to the factory. And then they very rarely leave. A couple of them do leave the area, but most of them stay pretty close to the factory itself. They're living there, they're sleeping there, they're working there, and they're being brought in straight from the airport. So it's obviously something that's very concerning. Locals also voiced concerns to her about Semacorp's factory operation. A lot of them were just worried because it's a foreign company that's not operating near their homes. And so a lot of them did have questions in regards to that. They didn't understand what exactly they were doing there. Many people who I spoke to even were kind of concerned about the issue with them working throughout the night. Apparently, the factory is operating during nighttime hours. And so if you live locally, this is something that's very noticeable, according to them. Separately, an enterprise zone agreement that the local county reached with Semacorp may be terminated. Such agreements typically use tax incentives to encourage companies to invest in an area. The Chinese Communist Party carrying out a growing campaign of intimidation against critics here on American soil. A new report documents hundreds of incidents over the past five years. NTD's Washington correspondent Jack Bradley has more. A new report says Beijing's campaign to silence dissent isn't confined to China, it's hitting right here in the U.S. and growing by the year. Researchers with the Falun Dafa Information Center documented more than 600 cases of transnational repression in the U.S. between 2020 and 2025. The incidents span more than 30 states, and the report says credible cases increased tenfold during that period. The report's based on a survey of more than 1,000 practitioners of Falun Gong, a spiritual faith with meditation and based on truthfulness, compassion, and tolerance. The Chinese Communist Party has aimed to eradicate the practice since 1999. Nearly half of the respondents surveyed say they were previously detained, tortured, or forced into labor in China. Researchers say that many now report facing intimidation in the U.S. That includes verbal attacks, physical confrontations at information booths, and vandalism targeting vehicles displaying pro-Falun Gong messages. The report says since 2023 there has been a notable rise in reports of harassment, violent threats, and other forms of transnational repression targeting American practitioners. Researchers say that one of Beijing's primary targets is New York-based Shen Yun Performing Arts. The dance company depicts traditional Chinese culture and portrays the persecution of Falun Gong in China. Shen Yun performers and staff have had their tour bus tires slashed, faced online harassment, and hundreds of hoaxed bomb and death threats, many traced back to China. They've also faced direct pressure from Chinese authorities to cancel their performances in the U.S. We have dozens, literally dozens, of letters from Chinese diplomats directly telling theaters, local government leaders, not to have Shen Yun perform, stop them, in some cases, sort of implied threats, economic coercion, that kind of thing. The report urges U.S. government officials to make transnational repression a standing national security priority with targeted sanctions against those perpetrators. Jack Bradley, NTD News, Washington. Washington is lifting restrictions on one of America's most advanced artificial intelligence systems. Officials say the move will help the U.S. lead in AI development. The Commerce Department lifted export restrictions on Anthropic's Fable and Mythos AI models on Tuesday after working with the company on new security safeguards. The models were temporarily blocked because of concerns they could help identify software vulnerabilities that hackers might exploit. Federal officials say Anthropic agreed to strengthen protections and work with Washington on future AI safety standards. The company also says it updated its latest model to be even more restrictive when responding to cybersecurity-related requests. The decision comes as China ramps up its own AI efforts. Earlier this year, one of China's largest cybersecurity companies unveiled new AI tools designed to compete with Anthropic's technology. The tools are built to find software vulnerabilities and help defend against cyberattacks. U.S. officials say maintaining access to advanced AI is important as Washington competes with Beijing for leadership in artificial intelligence. July 1st marks the anniversary of the founding of the Chinese Communist Party. The day is also observed by overseas Chinese communities as Global quit the CCP day. On Tuesday, the Global Service Center for Quitting the CCP reported a record 1.2 million declarations in May. That's more than 40,000 per day, bringing the total to 463 million. These individuals published their statements on a U.S.-based website operated by our sister media, The Epoch Times. Most use pseudonyms to protect their identities and keep themselves and their families in China safe. To mark Global Quit the CCP Day, volunteers with the New York-based Quit the CCP Center organized an End the CCP Motorcade rally over the weekend. A convoy of more than 20 vehicles displayed banners reading End the CCP's Tyranny, A New China Without the Communist Party, Stop the CCP's Transnational Repression, and Hold the CCP Accountable for Crimes Against Humanity. The motorcade traveled through Times Square, Chinatown, and several neighborhoods with large Chinese communities, drawing attention to the campaign and its message. Ahead of July 1st, Chinese Americans gathered outside the Chinese consulate in New York to protest the Communist Party. They carried a black coffin while chanting slogans such as Down with the CCP. They were calling for the CCP to get out of both the United States and China. Beijing is ramping up its global clampdown in new ways. It's enacting a new law that allows a regime to target people abroad. The so-called Ethnic Unity Law allows the CCP to prosecute individuals and entities abroad if their actions are deemed by Beijing to undermine national unity or incite separatism. The law's sweeping provisions could be used to punish or intimidate people the regime dislikes abroad, including in the United States. House lawmakers are introducing a bipartisan resolution condemning the Chinese law. They say it will expand the CCP's efforts to enforce its ideology internationally and eliminate cultural and religious rights. They stress that the law risks criminalizing a broad range of activities in the U.S., including peaceful expression, religious worship, and reporting. Coming up, China is deploying a new warship into the Pacific as Beijing expands its naval reach. Meanwhile, U.S. allies are responding with dozens of military exercises across the region. And the Supreme Court affirming that all babies born in the U.S. are automatically American citizens, even if their parents are in the country illegally or are tourists seeking citizenship for their child. The ruling defies President Trump's effort to narrow in on birthright citizenship. We look at how the president could turn the tide and why it matters for China. Welcome back to China In Focus. I'm Tiffany Meyer. China expanding its naval reach. It's sending one of its newest and most advanced warships into the Pacific on its first long-range deployment. Its newest advanced warship, Dongguan, entered the Pacific after sailing through a key waterway near Japan Tuesday. Japan's military tracked the ship, deploying a frigate and a patrol aircraft to monitor its movements. The deployment comes just months after it was commissioned in March. The 13,000-ton ship is one of the most powerful surface combatants in Beijing's navy. The warship is also large enough that some military analysts compare it to a guided missile cruiser. China's The growing number of Chinese warships in the Pacific is raising concerns among U.S. allies in the region, including Japan, the Philippines and other countries that share those waters. In the meantime, U.S. and its allies in the region are not staying idle. Each year, Operation Pathways, a year-round U.S. Army campaign in the region, includes more than 50 military exercises with 25 countries across the Indo-Pacific. The Supreme Court handed down several major rulings on Tuesday. Most significantly for the White House, it rejected President Trump's executive order to limit birthright citizenship. The order sought to deny citizenship to children born in the U.S., to parents who are in the country illegally or temporarily. In other words, the longstanding rule remains. Anyone born on U.S. soil is an American citizen, regardless of their parents' immigration status. The president, responding to the ruling in a Truth Social post, saying quote, the Supreme Court upheld birthright citizenship, which is too bad for our country, but we can easily make it up in Congress through legislation. To discuss the ruling Tuesday on Tiffany Meyer Tonight, we spoke with Nima Rahmani, former federal prosecutor and president of West Coast Trial Lawyers. Justice Thomas, in a dissenting opinion, wrote that this ruling devalues American citizenship and that he didn't believe it would stand the test of time. What are your thoughts on that? Potentially, yes. I mean, the issue is this. There's the public policy arguments, and I fully understand the issues with birth tourism and illegal immigration and people referring to children of people here unlawfully as anchor babies. The problem is, you're running up against the plain text of the 14th Amendment, and it says people born in the United States and subject to the jurisdiction thereof, they're United States citizens. So to argue that someone who's here unlawfully who has children or someone who's here on a tourist visa, they're not subject to the jurisdiction of the United States. That was always going to be a difficult and tortured reading of the 14th Amendment. I understand it's unpopular, but there are other amendments in the Constitution that may be unpopular, like the First Amendment and Second Amendment. So reading into the Constitution a particular way because you don't like the result isn't the way to go. You don't like it, the proper remedy is a constitutional amendment. Now, Justice Kavanaugh wrote that Congress could pass legislation to the effect of President Trump's executive order without needing to amend the Constitution. Now, the President immediately called on Congress to do so, saying they could do it easily and no long and unwieldy constitutional amendment is necessary. Now, the Speaker didn't seem to think it would be that easy, but what do you think, can Congress do this? Well, it's certainly the easier path than getting three-fourths of the states to agree to a constitutional amendment. I think what Justice Kavanaugh is saying is somewhat of a middle ground. The Constitution doesn't prohibit it, but there's a more than 100-year statute on the books that does. So the President would still need one of the majority justices to either flip, retire, or sadly pass away, because there's still five of those justices that do say that this is constitutionally prohibited. Again, if there is a change by just one justice in the makeup of the Supreme Court, this could shift in the other direction if, of course, Congress could pass the law, get past the Senate filibuster, and of course, be signed into law by the President. So we're actually a lot closer to getting rid of birthright citizenship than a lot of people anticipated years ago. And as for the Supreme Court ruling on the birthright citizenship's impact on China, we spoke with Joshua Phillip, host of The Josh Phillips Show and Crossroads, and Chris Bobb, NTD's political correspondent, for their take. After the birthright citizenship ruling came down, President Trump posted, I would like to congratulate President Xi and the great country of China on their massive birthright citizenship win, in all caps. Josh, what do you think? Well, I think Trump is reacting, of course, to the book by Peter Navarro, where he found that the Chinese Communist Party is massively scamming birthright citizenship by going through Saipan, having people have kids there, bringing them back to China, raising them on the Chinese system, and who knows, maybe eventually having them vote in our elections. But I think right now there's two paths Congress is looking at. One is changing the Constitution. I mean, imagine without the 14th Amendment where we'd be. The other side they're talking about is, of course, actually passing legislation through Congress, getting it signed by the President. And basically what they're saying is they need to wait until they maybe get a justice, new one in or one of them out or something like that. And they believe that if they do that, that could be the road to it. The reality is it's a tough battle. At this point, it doesn't look like they're going to change it. Well, to your point, Peter Schweitzer has been talking about this for a long time on birth tourism in China, how a lot of these people are quite rich, tied to different levels of the Communist Party inside China. They come here through surrogates, they have the child, and then they bring the child back to China, who's then raised there under the communist system, but can vote in U.S. elections, pointing out that concern. There's already been some posts across Chinese social media that are apparently quite happy about this ruling. Chris, I want to go to you, though. Do you think we'll start to see Republicans working toward a constitutional amendment? Well, constitutional amendment, definitely not. I'll skew those fears in the hearts of millions. It's not going to happen. Because they just don't have it. But I'm proud to live in a nation where if you look us up on Yelp, a maternity ward is a place of interest to visit. It's really sad. You mentioned Justice Alito, what he said. Basically, you can have an adversary come over here for a few minutes, give birth, whatever, go back, and then you're a citizen. You can plot against us from afar, but you're still entitled to certain things like Social Security or other benefits, even though you're really not from here. Now, the argument that I heard that I think was the best, and there were quite a few good arguments out there, but essentially, if you think about why the 14th Amendment came to be, you had previously enslaved people, and they fought and died for a country where they were citizens at the time, but they could be called upon in a time of war to do those things. So they had every right, truly, to be citizens of this country. Then you think about people in that other scenario that Alito gave, who just popped in momentarily. I mean, it boggles the mind why somebody, for any other reason, would be given something as precious as United States citizenship if they're not willing to do the same as all those people who sacrificed themselves did. So yeah, it's upsetting. We're talking about the law, the Immigration and Nationality Act. If we amend that, which is far more likely to allow one of the provisions, it's already listed that children of Native Americans from the 1900s are people that don't qualify, people born as children to foreign ministers don't qualify for citizenship. If you add, basically, this is Justice Kavanaugh's thing, that people who come here for the express purpose of giving their children citizenship, they don't qualify, maybe you can get something like that. Now, what's going to happen is that's going to go back to the Supreme Court, and then Kavanaugh will rule differently. That's all for today's China In Focus. I'm Tiffany Meyer. If you have any feedback on the show or have something you'd like to see us cover, send us an email at chinainfocusatntd.com. We'd love to hear from you. For on the clock original news coverage, visit us at ntd.com or download our NTD app. Thanks for watching. See you tomorrow.