House minority leader blocked bipartisan effort to limit China’s role in U.S. transit, a move that benefited firm in his district
By Damian Paletta and Damian Paletta Reporter covering economic policy Email Bio Follow Erica Werner Erica Werner Congressional reporter focusing on economic policy Email Bio Follow May 21 at 1:19 PM House Minority Leader Kevin McCarthy blocked a bipartisan attempt to limit Chinese companies from contracting with U.S. transit systems, a move that benefited a Chinese government-backed manufacturer with a plant in his district, according to multiple people familiar with the matter.
McCarthy’s move to protect a Chinese company’s interests frustrated even some members of his own party because they have warned repeatedly that allowing Chinese-backed firms access to U.S. infrastructure systems could pose a national security risk to the United States. Lawmakers of both parties have complained that U.S. tax dollars should not be used to support projects that benefit foreign companies.
A House version of the bill, which McCarthy supported, exempted bus manufacturers from this prohibition, according to McCarthy’s office — a key provision that would have protected BYD. Senate negotiators wanted their broader, bipartisan restrictions pushed into the final law but McCarthy objected, according to three officials, speaking on condition of anonymity to discuss the private talks.
The enterprises are either partially owned by the Chinese government or receive financial support from it, and critics say those direct or indirect subsidies give them an unfair advantage over U.S. manufacturers. The Trump administration has engaged in broad trade negotiations with China, which have soured in recent weeks — in part over the issue of China’s extensive network of government-backed enterprises.
The official — Zachary Kahn, North America government relations director for BYD Motors — emphasized BYD’s civic ties to the towns of Lancaster and Palmdale in and near McCarthy’s inland Southern California district, including support for the Boy Scouts and the California Poppy Festival. He said BYD employs 775 union members as part of its U.S. workforce, most of whom work at the Lancaster plant.
Li had never given McCarthy or either of the political action committees money before that time, according to the Federal Election Commission. Sparks, the McCarthy spokesman, said the congressman had been familiar with issues related to BYD for several years. “BYD stands by its products and its U.S. employees,” Kahn told lawmakers Thursday, adding: “This competitive dynamic supported by BYD’s presence in the U.S. has also driven down costs for transit agencies.”
Mitchell asked Kahn for details on the terms of the grants and other information about the company’s organization, which Kahn was mostly unable to supply.
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