Two new bills introduced in the U.S. Congress today seek to strip China of its permanent normal trade relations status. In the House of Representatives, John Moolenaar (R-Michigan), who also serves as the chair of the House Select Committee on the Chinese Communist Party, and Tom Suozzi (D-New York) introduced the Restoring Trade Fairness Act; Senators Jim Banks (R-Indiana), Tom Cotton (R-Arkansas), and Josh Hawley (R-Missouri) introduced a companion bill to the Senate.
The bill would “suspend normal trade relations with the People’s Republic of China and… increase the rates of duty applicable with respect to articles imported from the People’s Republic of China.”
“Normal trade relations status” (previously known as “most favored nation status”) essentially means that a country’s exports to the United States enjoy lower tariffs. As the name implies, the United States grants this status to nearly every country in the world, with only four exceptions at present: Belarus, Cuba, North Korea, and Russia. Some countries need annual waivers to enjoy that status; others, like China, have been granted “permanent normal trade relations status.”
To give some concrete examples, for clothing, countries with normal trade relations status might pay 4.4 percent to 9.4 percent in tariffs, depending on the specific item. For countries without that status, tariffs jump to 60-90 percent. For toys, tariffs would jump from zero to 30-90 percent. For most electrical goods, tariffs would rise from 2.5 percent to 35 percent.
The bill would go beyond that by applying additional tariffs to China beyond what is provided in the Harmonized Tariff Schedule: a minimum 35 percent tariff for “non-strategic goods” and a minimum 100 percent tariff for “strategic goods.” Those increases would be phased in over five years. It would also strip China of “de minimis” treatment, under which imports valued below $800 are not subjected to customs duties – which would be a major blow to Chinese direct-to-consumer e-commerce sites like Shein and Temu.
The bill notes that “Since the entry of the People’s Republic of China into the WTO, the United States has lost tens of thousands of factories, millions of manufacturing jobs, and trillions of dollars of intellectual property.” It adds that “continued treatment of the People’s Republic of China as a beneficiary of normal trade relations status poses an unacceptable threat to national security and undermines efforts to promote resilient supply chains and economic integration with allies of the United States.”
“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,” Moolenaar said in a statement accompanying the bill’s release. He cited a “bipartisan consensus that both parties recognize the need to reset our economic relationship with China.”
Congress granted China permanent normal trade relations status in 2001, after China joined the World Trade Organization. Before that, starting in 1980, China had enjoyed free trade access to the U.S. market, but only through the granting of a new waiver every year. The permanent status ended a long-term game of threatening to revoke China’s trade privileges over human rights concerns, particularly in the aftermath of the bloody crackdown on protesters in Tiananmen Square in 1989.
As China-U.S. frictions heated up, particularly the trade war of tit-for-tat tariffs that began in 2018, there has been a growing push to end China’s permanent normal trade status. A press release on the bill from the House Select Committee of the CCP noted that “tariff measures across the last three presidential administrations” had “effectively already revoked China’s PNTR status.”
Similar bills had been introduced in the past, including in 2023 and again in 2024. In both cases, the bills never made it out of committee. Most anti-China legislation, in fact, is introduced to much fanfare and then quietly dies.
However, the backers are hoping to capitalize on Republican control of Congress and new President Donald Trump’s fondness for tariffs to pass the legislation. Trump had threatened across-the-board tariff increases on Chinese exports to the United States; revoking China’s permanent normal trade relations status would not only achieve that goal but codify it into law, making it difficult for future presidents to reduce tariffs.
That said, it’s not clear where Trump himself will come down with regards to the bill. The America First Trade Policy released on Trump’s first day in office specifically called on the secretary of commerce and the United States trade representative to “assess legislative proposals regarding Permanent Normal Trade Relations with the PRC and make recommendations regarding any proposed changes to such legislative proposals.” However, it stopped short of recommending revoking China’s trade status.
