Firm linked to top Biden advisor lobbying to soften U.S. trade policy toward China

Firm linked to top Biden advisor lobbying to soften U.S. trade policy toward China
Joe Biden, Xi Jinping

By Chuck Ross

A consulting firm co-founded by Joe Biden’s incoming White House counselor registered in August to lobby for a tech company regarding U.S. trade policy with China, which is likely to remain a hot-button issue in the Biden administration.

Applied Materials, a California-based semiconductor materials manufacturer, hired Ricchetti Incorporated in August to lobby Congress on China-related matters, according to lobbying disclosure reports filed with Congress.

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Steve Ricchetti, the Biden adviser, and his brother, Jeff Ricchetti, founded Ricchetti Inc. in 2001.

Jeff Ricchetti is listed as lobbyist for Applied Materials in the disclosures filed with Congress.

The lobby shop took in $40,000 in the third quarter of this year to lobby the House and Senate on “issues related to US-China relations and potential impact on commercial relationships,” according to a lobbying disclosure report filed on Nov. 6.

Steve Ricchetti’s financial ties to the company he founded are not clear. He has not registered as a lobbyist for the firm since 2010, before he began working as chief of staff to then-Vice President Joe Biden.

CNBC reported that Steve Ricchetti may have to recuse himself from matters related the pharmaceutical industry because his brother lobbies for two drug companies, GlaxoSmithKline and Horizon Therapeutics.

Ricchetti Inc.’s work for Applied Materials could also pose a potential conflict of interest given the consistent focus on the U.S.-China trade relationship.

Trade with China has become precarious in recent years, as the Trump administration has enacted tariffs on hundreds of billions of dollars of goods from China, and prohibited U.S. firms from doing business with Chinese companies linked to the People’s Liberation Army.

The administration in October placed new restrictions on U.S. suppliers of China’s largest chip maker, Semiconductor Manufacturing International Corporation (SMIC). The Commerce Department expressed concerns that SMIC might divert some of its materials to the Chinese military.

Applied Materials, which has done business in China since 1984, is one of SMIC’s largest suppliers, according to Reuters.

The company has used its own in-house government relations team to lobby Congress and government agencies on a variety of issues related to China, including an investigation that the U.S. Office of Trade Representative opened in 2017 into China’s trade practices.

Applied Materials paid $250,000 in the third quarter of this year on those lobbying activities, according to its disclosures to Congress.

The Biden administration is widely expected to be far less aggressive toward China than the Trump administration has been.

Jim Cramer, a stock analyst for CNBC, said on Tuesday that Applied Materials and other chip suppliers who do business in China are likely to see a boom in the Biden administration following years of tension between China and the Trump administration.

While it is not yet clear whether Steve Ricchetti will handle China-related issues in the Biden White House, he has past experience working on U.S.-China trade policy.

Then-President Bill Clinton tapped Ricchetti, his deputy chief of staff, in early 2000 to spearhead a campaign to convince lawmakers to vote for so-called Permanent Normal Trade Relations (PNTR) with China.

PNTR granted China the same trade status as other U.S. trade partners.

Clinton asserted that the bill would help U.S. companies seeking to do business in China, would improve the conditions for Chinese workers, and would advance democratic reforms in China.

The bill has come under heavy scrutiny in the two decades since its passage. Republicans, who voted more in favor of the Clinton bill than did Democrats, have turned hawkish on trade with China.

U.S. officials have accused Beijing of manipulating its currency and dumping goods in Western markets.

PNTR also led to a “sharp decline” in the number of U.S. manufacturing jobs, according to a widely-cited Yale study from 2012.

Progressives largely opposed PNTR before its passage, arguing that it would hurt U.S. manufacturing jobs.

In 2005, then-Rep. Bernie Sanders introduced a bill to repeal PNTR, calling it an “absolute failure” for U.S. workers.

Jeff Ricchetti and the Biden transition team did not respond to requests for comment.

Applied Materials also did not respond to a request for comment.

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