US lawmakers introduce bill to repeal China's preferential trade status

China is the US's largest trading partner, with bilateral trade hitting a record $690.6 billion in 2022

US legislators on Thursday introduced the Restoring Trade Fairness Act, seeking to repeal China’s Permanent Normal Trade Relations (PNTR) status, which it has held since 2000. This legislation, introduced in both the House of Representatives and the Senate, proposes sweeping changes to US-China trade relations, including higher tariffs and stricter import rules.

 

The bill has been introduced as President Donald Trump continues to advocate for tougher measures against Beijing. However, it must pass through the Republican-controlled House and Senate before being signed into law. The proposed bill comes days after Trump suggested imposing a 10 per cent tariff on Chinese imports as a penalty for the flow of fentanyl into the US.

 

If enacted, the legislation would represent a monumental shift in US-China trade relations, marking the end of an era that began over two decades ago when China joined the World Trade Organization under PNTR terms.

 

Provision of The Restoring Trade Fairness Act

Ending PNTR for China: The bill proposes to revoke China’s preferential trade status, marking a significant shift in US-China economic relations.

 

Phased tariffs: It outlines a five-year phase-in period for tariffs on Chinese imports, including a 100 per cent tariff on goods deemed critical to national security.

 

Supplementary tariffs and quotas: The US President would be empowered to introduce additional tariffs and quotas, and even ban certain Chinese goods entirely.

 

Elimination of De Minimis treatment: The bill proposes ending exemptions on shipments under $800 for imports from China and other covered nations, requiring more rigorous screening.

 

Bipartisan support for bill

The bill has garnered bipartisan support, with Republican Senators Tom Cotton of Arkansas and Jim Banks of Indiana leading the initiative, alongside Congressman John Moolenaar of Michigan. For the first time, a Democratic co-sponsor, Representative Tom Suozzi of New York, has joined the effort.

 

“For too long, permanent normal trade relations with China have undermined our manufacturing base, shifted American jobs abroad, and allowed the CCP to exploit our markets while betraying the promise of fair competition. In response, this legislation will safeguard US national security, enhance supply chain resilience, and bring manufacturing jobs back to America and our allies. The bipartisan consensus that both parties recognise the need to reset our economic relationship with China is a big win for our nation and the Select Committee,” said Congressman Moolenaar.

 

“This bipartisan bill makes the message clear — the Chinese Communist Party cannot receive preferential tariff treatment. The Chinese Communist Party is engaging in unfair trade practices that devastate the American manufacturing industry’s ability to compete, contribute to the theft of American intellectual property, and allow goods made with forced Uyghur labour in Xinjiang to enter our supply chain,” Congressman Suozzi added.

 

Will this bill help or hurt the US economy?

Proponents believe this legislation is a critical step toward protecting US workers, enhancing supply chain resilience, and reducing dependence on China for strategic goods. They also argue that revoking Permanent Normal Trade Relations (PNTR) status aligns with broader efforts to address human rights violations, including forced labour in China’s Xinjiang region.

 

However, critics warn of significant economic consequences. China remains the US’s largest trading partner, with bilateral trade reaching a record $690.6 billion in 2022. Revoking PNTR could escalate trade tensions, disrupt supply chains, and provoke retaliatory measures that would impact US businesses reliant on Chinese imports.