Restoring Trade Fairness Act

Chairman John Moolenaar (R-MI) of the the House Select Committee on the Chinese Communist Party introduced the Restoring Trade Fairness Act today, a bill that would revoke China’s Permanent Normal Trade Relations (PNTR). In 2000, as China prepared to enter the WTO, Congress voted to extend PNTR status to the People’s Republic of China (PRC), hoping that the Chinese Communist Party would liberalize and adopt fair trading practices. Achieving PNTR status meant that the Chinese state-run economy received preferential tariff treatment under U.S. law, opening the door for the mass influx of products made in the communist nation. This gamble failed. In the two decades since, the United States manufacturing industry has been depleted, American firms have had their intellectual property pillaged by CCP economic coercion, and the CCP grew into America’s foremost adversary.

Senators Tom Cotton (R-AR), Marco Rubio (R-FL), and Josh Hawley (R-MO) introduced companion legislation in the Senate earlier this year.

Following the bill’s introduction, Chairman Moolenaar said, “Today, I have introduced the Restoring Trade Fairness Act to stop the Chinese Communist Party from taking advantage of America and to level the playing field for American workers and our allies. Having permanent normal trade relations with China has failed our country, eroded our manufacturing base, and sent jobs to our foremost adversary. At the same time, the CCP has taken advantage of our markets and betrayed the hopes of freedom and fair competition that were expected when its authoritarian regime was granted permanent normal trade relations more than 20 years ago.

“Last year, our bipartisan Select Committee overwhelmingly agreed that the United States must reset its economic relationship with China. Today, building on tariffs from the Trump and Biden Administrations, the Restoring Trade Fairness Act will strip China of its permanent normal trade relations with the U.S., protect our national security, support supply chain resilience, and return manufacturing jobs to the U.S. and our allies. This policy levels the playing field and helps the American people win this strategic competition with the CCP.”

“China’s Permanent Normal Trade Relations status has enriched the Chinese Communist Party while costing the United States millions of jobs. This comprehensive repeal of China’s PNTR status and reform of the U.S.-China trade relationship will protect American workers, enhance our national security, and end the Chinese Communists’ leverage over our economy,” said Senator Cotton.

Read the Restoring Trade Fairness Act HERE.

Background:

To combat the CCP’s economic warfare, President Trump implemented a series of tariffs in 2018 on hundreds of billions worth of Chinese goods. President Biden continued those tariffs and even expanded them to include Chinese electric vehicles. This bipartisan consensus across presidential administrations has effectively already revoked China’s PNTR status. As a result, the Select Committee voted nearly unanimously in 2023 to recommend revoking China’s PNTR status in statute. The Restoring Trade Fairness Act achieves this bipartisan goal and codifies a series of tariffs to push back against the CCP’s state-run economic aggression. The bill provides American businesses a clear structure and strategy to compete against CCP-aligned companies, provides assurances in the case of Chinese retaliation, and rectifies the jobs-killing mistake of granting Communist China privileged access to the American market.

The recent United States International Trade Commission (ITC) report confirms that Section 301 tariffs on products from the PRC have not contributed meaningfully to inflation. Instead, these tariffs encouraged a shift in supply chains, reducing U.S. reliance on PRC imports in key sectors like electronics, automotive parts, and apparel. For every 1 percent increase in tariffs, imports from the PRC declined by about 2 percent, as U.S. importers diversified their manufacturing. Ultimately, the report highlights that the tariffs achieved a reduction in PRC dependence without causing significant price increases for U.S. consumers.

How The Bill Works:

• The bill would end PNTR for China. There would be no annual Congressional vote for recertification. It would codify tariffs in statute and create a new tariff column for China.
• The new column would create a minimum 35% ad valorem (in proportion to the estimated value of the goods or transaction) tariff for non-strategic goods and a minimum 100% ad valorem tariff for all strategic goods.
• Phase-in period: The new tariff column rates would be phased-in over five years with 10 percent of the tariff increase implemented in year one, 25 percent of the increase implemented in year two, 50 percent of the increase implemented in year four, and 100 percent of the increase implemented in year five.
• Strategic Goods: Strategic goods are listed in the bill by HS code. They are based on the Biden administration’s Advanced Technology Product List and China’s Made in China 2025 plan.
• The bill would end De Minimis treatment for covered nations (including China) and require customs brokers for other de minimis shipments.
• It would provide tariff revenue to U.S. farmers and manufacturers injured by possible Chinese retaliation. Additional revenue would be used to purchase munitions vital to deterring CCP aggression in the Pacific.