Bill seeks to revoke China's trade status

Another round of anti-China legislation was proposed in the US House of Representatives on Thursday.

Called the "Restoring Trade Fairness Act", the bill's aim is to revoke China's Permanent Normal Trade Relations, or PNTR, status.

US President Donald Trump, who campaigned to raise tariffs on China to 60 percent or higher, proposed an additional 10 percent tariff on Chinese imports earlier this week.

While Trump didn't comment on the legislation, in an interview with Fox News aired on Thursday evening, Trump said, "I can do that," when asked if he could make a deal with China over fair trade practices.

Trump said he would rather not use tariffs against China but called tariffs a "tremendous power".

"But we have one very big power over China, and that's tariffs, and they don't want them, and I'd rather not have to use it," Trump added.

Commenting on these remarks, Chinese Foreign Ministry Spokeswoman Mao Ning said at a news conference on Friday that the economic and trade cooperation between China and the United States is mutually beneficial and win-win.

She said that the two sides could resolve their differences through dialogue.

"Trade wars and tariff wars have no winners and don't serve anyone's interests or the world's interests," Mao added.

The latest congressional legislation would place a minimum 35 percent tariff on nonstrategic goods and a 100 percent tariff on strategic goods from China, which would be phased in over five years.

It would also end the "de minimis" rule for China or the $800 value level below which imports are not subject to customs duties. If "de minimis" were revoked, it would affect e-commerce websites such as Temu and Shein, which are highly popular with US consumers.

"This legislation will safeguard US national security, enhance supply chain resilience, and bring manufacturing jobs back to America and our allies," said Representative John Moolenaar, a Michigan Republican.

Moolenaar proposed the legislation in the House with Representative Tom Suozzi, a New York Democrat. A similar bill was introduced in the Senate by Senator Tom Cotton, an Arkansas Republican, and Senator Jim Banks, an Indiana Republican.

Marco Rubio, a former senator from Florida who was this week confirmed as secretary of state, was an original co-sponsor of the bill when it was introduced in November. Rubio has been a frequent critic of China.

In an analysis published on Jan 17 by the Peterson Institute for International Economics in Washington, the authors Warwick J. McKibbin, an Australian economics professor, and Marcus Noland, executive vice-president of PIIE, wrote: "If the US imposed an additional 10 percent tariff on China and China responded in kind, US GDP would be $55 billion less over the four years of the second Trump administration, and $128 billion less in China."

"Inflation would increase 20 basis points in the US, and after an initial dip, 30 basis points in China."

The US Congress had voted to give normal trade status to China in 2000, under then-president Bill Clinton. That, in turn, allowed China to join the World Trade Organization, or WTO, which also provided US consumers with the benefit of purchasing Chinese imports.

Negotiating ploy

"Time will tell if actual legislation will be passed or it is more a negotiating ploy to gain the upper hand over China," Tom Watkins, former Michigan state superintendent of education, told China Daily.

"I am hoping to see a more defined US foreign policy unfold that springs from strategic blueprint rather than reactions to discrete events," Watkins said. "A winlose strategy may sink both our boats."

Countries with PNTR status have a tariff of around 3 percent on average, although China has been paying more since 2018, when Trump began imposing tariffs in his first term. The previous Joe Biden administration kept most of those tariffs in place and raised others, such as on electric vehicles and batteries.

"The only certainty is that new tariffs will be costly for the United States. While the ultimate impact on prices will depend on import demand and supply elasticities, research on the US-China trade war found resounding evidence of complete pass-through of tariffs to importers," according to another analysis published by PIIE in December.

"The implication for the domestic market is that American consumers and firms will bear the effect of higher tariffs, with substantial costs for the average American household, and a burden that falls more heavily on lower-income households."

Agencies contributed to this story.

hengweili@chinadailyusa.com

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