WASHINGTON — The Coalition for a Prosperous America (CPA) today applauded legislation introduced by U.S. Senator Josh Hawley (R-MO) that would revoke China’s Most Favored Nation (MFN) tariff status. This is a critical first step to reduce our import dependency on China. Too many transnational enterprises continue to lean on China for sourcing for the U.S. market, to the detriment of America’s economic and national security.
Senator Hawley’s bill includes a two-year delay in implementation of the MFN repeal, a generous accommodation to importers who continue to source from China. The tariffs on Chinese imports imposed pursuant to Section 301 of the Trade Act of 1974 only cover approximately one-third of what we import from China in any given month. China’s top exports of laptops, cell phones, and childrens’ toys continue to be imported without any tariff whatsoever.
In January, CPA Trade Counsel Charles Benoit released a guide on repealing China’s Most MFN status—a policy CPA believes is a must-do for any trade package in the 118th Congress. Last December, the U.S.-China Commission, a group created by Congress to advise on managing the bilateral relationship, formally recommended that China lose its MFN tariff status. A poll conducted by Morning Consult last year found that 60% of voters oppose China continuing to receive MFN trade status with the U.S.
CPA also applauded legislation introduced by Senators Tom Cotton (R-AR), along with Sens. Rick Scott (R-FL), Ted Budd (R-NC), and J.D. Vance (R-OH) to strip China of its Permanent Normal Trade Relations (PNTR) status. Their legislation makes China’s MFN status subject to annual presidential approval, per the requirements of the Jackson-Vanik Amendment, rather than automatically terminating MFN status. The bill would also expand the Jackson-Vanik Amendment to include human rights and certain trade abuses as disqualifying factors for MFN status.
“It is time for Congress to remedy the past mistake of granting China MFN status,” said Michael Stumo, CEO of CPA. “China did not—as supporters of granting China MFN wrongly predicted—become more open, democratic, and free market oriented. Instead, the CCP used autocratic state planning strategies, forced labor, intellectual property theft, and illegal trade activity to weaken the U.S. economy, absorb Hong Kong, threaten Taiwan, and become America’s biggest geopolitical threat. We look forward to working with Democrats and Republicans to pass legislation that revokes China’s Most Favored Nation status, recognizes the folly of eliminating most tariffs under the guise of ‘rules-based trade’ for non-market economies, and imposes higher tariffs on Chinese goods that are made with forced labor and subsidized by the CCP.”