Democrats Urge Trump Administration to Confront China on Industrial Overcapacity

Madrid/Washington, September 15 — U.S. Democratic lawmakers have called on the Trump administration to press China to curb what they describe as “structural overproduction,” effectively demanding an overhaul of Beijing’s economic model, as Treasury Secretary Scott Bessent holds talks with Chinese officials in Spain.

In a letter sent Friday to Bessent and other senior trade officials, members of the House Select Committee on China said any future trade deal must include “binding requirements” for Beijing to reduce industrial overcapacity. The lawmakers argued that China’s strategy of producing far more manufactured goods than it can consume domestically has led to a surge of exports abroad, global price wars, and pressure on U.S. jobs and industry.

“The PRC’s historic and destructive use of structural overproduction to drive economic growth comes at an indisputable cost to U.S. industry, employment, and the stability of international markets,” the letter stated, referring to China’s official name, the People’s Republic of China.

The issue has long been raised by Washington, including during the Biden administration under former Treasury Secretary Janet Yellen. However, it remains uncertain whether the Trump administration—known for its reliance on tariffs as its primary trade weapon—will heed Democratic demands.

The letter specifically cited China’s steel and solar panel industries, where rapid capacity expansion was followed by waves of cheap exports that undercut global competitors. It urged the administration to address overcapacity in ongoing trade talks, while also working with allies and partners to mount a coordinated international response.

Bessent, along with U.S. Trade Representative Jamieson Greer and Commerce Secretary Howard Lutnick, began negotiations in Madrid on Sunday with a Chinese delegation led by Vice Premier He Lifeng. The Treasury and Commerce departments declined to comment on the Democrats’ letter.

For its part, Beijing dismissed the criticism. Chinese foreign ministry spokesman Lin Jian said: “We have repeatedly stated that hyping up the so-called overcapacity in China, which deviates from objective facts and economic laws, is providing an excuse for protectionism. Its true purpose is to curb China’s high-quality development. We firmly oppose this.”

The debate over overcapacity comes as the world’s two largest economies attempt to turn a temporary truce on punitive tariffs—extended for 90 days last month—into a more comprehensive trade deal. The negotiations continue to cover a wide range of contentious issues, from fentanyl trafficking and the U.S. trade deficit to the ownership of TikTok.