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Photo: Brendan Smialowski/AFP via Getty Images

Two U.S. senators are urging the Federal Transit Authority to clarify a ban on Chinese rail manufacturers and to warn local transit authorities of potential national security threats from China, in a letter obtained by Axios.

The big picture: The ban highlights a growing expansion of national security risks to include economic security, as the U.S. responds to Chinese government economic policies that many perceive as exploitative.

Details: Dated Feb. 13 and addressed to Transportation Secretary Elaine Chao, the letter from Senators John Cornyn (R-Texas) and Tammy Baldwin (D-Wis.) cites confusion about the ban and urges the FTA to provide information to U.S. localities explaining the details behind the new policy.

  • The National Defense Authorization Act for Fiscal Year 2020 includes a provision that prohibits local U.S. transit authorities from using federal grant money to purchase buses and passenger rail cars from state-owned or state-controlled Chinese companies.
  • The provision means Chinese rail manufacturing giants CRRC and BYD will be blocked from the U.S. market beginning in 2022, when the ban will take effect. (It already applies to the Washington, D.C. metro).

Between the lines: The lawmakers blend economic security with national security, casting Chinese government subsidies as part of an intentional strategy to achieve global geopolitical primacy.

  • Beijing is known to offer massive subsidies to certain Chinese national champions, such as Huawei, allowing them to systematically underbid competition in countries around the world and thus establish themselves as global leaders.
  • Both CRRC and BYD have benefited from preferential Chinese government policies. CRRC, which is owned by the Chinese government, is now the world's largest rail car maker.
  • Claims that Chinese-made rail cars could potentially pose a cybersecurity risk have elicited some degree of skepticism, since the claims are based not on events that are known to have happened, but rather an estimation of Chinese capabilities.

What they're saying: "The Chinese government has a history of using state subsidies and predatory corporate practices to achieve market dominance in a variety of economic sectors across the globe," the lawmakers wrote.

  • "Since implementation of its 'Made in China 2025' initiative, the Chinese government has identified U.S. rail and bus manufacturing as priority targets for sector dominance."
  • The lawmakers also stated that "different interpretations" of the law were causing confusion and asked the FTA to clarify the law to local transit authorities.

U.S. industry groups have supported the ban.

  • "We are not against foreign companies being involved in either freight or passenger rail. It’s the difference between a market-based company and a state-owned enterprise that does not abide by normal market rules," said Erik Olson, executive vice president of the Rail Security Alliance, a trade group that advocates on issues of transportation and security, in a statement provided to Axios.

Go deeper

24 mins ago - Health

FDA panel backs Merck's antiviral COVID pill

The Merck Cherokee Plant in Riverside, Pennsylvania. Photo: Paul Weaver/SOPA Images/LightRocket via Getty Images

A Food and Drug Administration advisory panel on Tuesday voted 13-10 to endorse an antiviral pill developed by Merck and Ridgeback Biotherapeutics to treat adults at high risk of becoming severely ill from COVID-19, despite concerns over its effectiveness and safety.

Why it matters: Oral antiviral drugs designed to prevent or treat COVID-19 could be key pandemic-fighting tools, if proven effective, especially as new variants emerge. If authorized, the Merck drug, known as molnupiravir, would be the first treatment of its kind to be made available in the United States.

Shooting at Michigan high school leaves 3 dead, 6 wounded

Screengrab: CBSN

Three people dead and six others are wounded after a shooting at a high school in Michigan according to the Oakland County Sheriff's Office.

Driving the news: The alleged shooter was a 15-year-old sophomore at Oxford High School and has been arrested, per police.

Fed signals it could yank economic support quicker as inflation sticks around

Federal Reserve chairman Jerome Powell testifies during a hearing before Senate Banking, Housing and Urban Affairs Committee today. Photo: Alex Wong/Getty Images

The Federal Reserve will consider pulling back economic support sooner "as the threat of persistently high inflation has grown," chair Jerome Powell said during a congressional hearing on Tuesday.

Why it matters: This is the biggest signal yet the Fed is backing away from its stance that soaring prices would be fleeting — a change that could shift its policies that underpin the economy.