Promoting legislation: US lawmakers propose the Restoring Trade Fairness Act

Restoring Trade Fairness Act, a new bill by US Congressman John Moolenaar, chairman of the House Select Committee on the Communist Party of China, recently announced the launch of a new bill called the Restoring Trade Fairness Act, which aims to end China's permanent normal trade relations (PNTR) status. This proposal is the latest effort by the US Congress in recent years to conduct a comprehensive review of US-China trade relations.

In his statement, Moolenaar pointed out that the existence of permanent normal trade relations has enabled China to gain unequal economic advantages over the past 20 years, eroding the US manufacturing base and leading to a large number of job losses. He emphasized that this bill is not only intended to restore a fair competitive environment, but will also support national security, enhance supply chain resilience, and provide new development momentum for the manufacturing industry of the United States and its allies.

Historical review: From most-favored-nation treatment to permanent normal trade relations

The evolution of US-China trade relations can be traced back to the 1980s. In the early days, the United States decided whether to extend China's "most-favored-nation treatment" (MFN) through annual reviews. This trade status enables China to enjoy preferential tariffs similar to other major trading partners. However, after the Chinese government suppressed the Tiananmen democracy movement in 1989, this treatment became a tool for the United States to put pressure on China on human rights issues.

Although the U.S. Congress attempted to end China's most-favored-nation treatment in 1990, it was vetoed by then-President George H. W. Bush. In 1994, then-President Bill Clinton passed an executive order to decouple China's trade status from human rights issues, laying the foundation for further deepening of U.S.-China economic and trade relations. Subsequently, in 2000, the United States formally granted China permanent normal trade relations status, a decision that also became an important prerequisite for China to join the World Trade Organization (WTO).

Cancelling PNTR: Voices and push in the United States

Mullenauer's Restoring Fair Trade Act is not an isolated action. Earlier this year, three Republican senators, including Tom Cotton, Marco Rubio and Josh Hawley, introduced similar bills in the Senate. They believe that China has failed to fulfill its obligations as a WTO member and has undermined global economic rules through unfair trade practices.

As early as 2023, members of both houses of the U.S. Congress proposed a similar "China Trade Relations Act", but it failed to become law due to the complexity of the legislative process. This time, Mullenard re-proposed similar legislation, reflecting the urgent desire of U.S. lawmakers to adjust U.S.-China economic relations.

The core goals of the new bill

According to Mullenard's statement, the "Restoring Trade Fairness Act" aims to achieve the following goals:

End China's permanent normal trade relations status and restore the annual review mechanism;

Protect the national security of the United States and reduce dependence on China's supply chain;

Promote the return of manufacturing jobs to the United States and allies;

Establish fairer economic rules for U.S.-China strategic competition.

Mullenard pointed out that trade relations with China need to be completely reset, especially in the context of China's exacerbation of global trade imbalances in recent years through state subsidies, technology theft and forced technology transfer. He said the bill will provide a fair competitive environment for American workers and counter the impact of the CCP's economic expansion.

Changes in the domestic political environment in the United States

With the Republicans regaining control of both houses of Congress in 2024, Mullenar's proposal may gain more support in the next legislative process. At the same time, the bills of the three Republican senators may also be more widely discussed and promoted in the Senate.

It is worth noting that after Trump was elected president, he nominated Marco Rubio as Secretary of State. This personnel decision may have a profound impact on the future policy direction of US-China economic and trade relations. Rubio is a hardliner on China policy and supports taking tougher economic and diplomatic measures against China.

The future of US-China economic and trade relations: change or deadlock?

The end of permanent normal trade relations may have a profound impact on US-China economic and trade relations. On the one hand, it will force China to reconsider its strategy for exporting to the United States, and it may also accelerate China's development of other markets. On the other hand, domestic companies in the United States may also face the challenge of increased import costs, especially in the manufacturing and consumer goods industries that rely heavily on China's supply chain.

But supporters believe that terminating PNTR will provide the United States with an opportunity to redefine its economic relationship with China, especially in areas such as supply chain security, technological competition and manufacturing reshoring.

An all-out economic game of confrontation

The Restoring Trade Fairness Act introduced by Mullenauer is an important step in the context of strategic competition between the United States and China, reflecting the United States' dual concerns about economic dominance and national security. In the coming months, whether this bill can pass the legislative process will still depend on the political game within Congress. However, it is certain that no matter what the outcome, the tension in US-China economic and trade relations will be further intensified. The final outcome of this game will not only concern the two countries, but will also profoundly affect the future direction of the global economic landscape.