WASHINGTON — The Coalition for a Prosperous America (CPA) today applauded legislation introduced by U.S. Representative Jim Banks (R-IN) 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 Josh Hawley (R-MO) introduced the companion legislation in the Senate in March.
Specifically, the Ending Normal Trade Relations with China Act would:
- Revoke China’s normal trade relations status.
- Subject imports from China to higher tariff rates.
- Provide the President with the authority to increase these tariffs even higher.
The 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 children’s 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.
“Granting China MFN status was a mistake, and we applaud Congressman Banks and Senator Hawley for introducing legislation to remedy it,” said CPA Chairman Zach Mottl. “Supporters of granting China MFN status wrongly predicted that the CCP would become more open, democratic, and free market oriented. Instead, China has exploited it to further its goal to undermine U.S. economic and national security via autocratic state planning strategies, forced labor, intellectual property theft, and illegal trade activity. It’s time for Congress to revoke China’s MFN status and impose higher tariffs on Chinese goods that are made with forced labor and subsidized by the CCP.”
