Yesterday, Representative John Moolenaar (R-MI) of the House Select Committee on the Chinese Communist Party, along with House Ways & Means Committee member Tom Suozzi (D-NY), reintroduced a bill in the House of Representatives to revoke Permanent Normal Trade Relations (“PNTR”) with the People’s Republic of China. When reintroducing the bill, Molenaar cited to Trump’s “America First Trade Policy” memo issued on Monday, which instructed the Department of Commerce and the USTR to assess legislative proposals regarding Permanent Normal Trade Relations with China.
The bipartisan “Restoring Trade Fairness Act” was first introduced in September 2024 as a companion bill to the identical “Neither Permanent nor Normal Trade Relations Act” proposed in the Senate by Tom Cotton (R-AR) and Jim Banks (R-IN) and would revoke China’s PNTR with no annual Congressional recertification vote. Crowell has published an in-depth summary of these earlier proposals, which were introduced prior to Trump’s inauguration.
The bill would create a new tariff column specifically for Chinese-origin goods, imposing statutory minimum tariffs of 35% for “non-strategic” goods and 100% for “strategic” goods, the latter of which are designated in the bill by HS code and are based upon the Biden administration’s Advanced Technology Product List and China’s Made in China 2025 plan. Under the proposal, the tariffs would be phased in over five years—10% of the increase in year one, 25% in year two, 50% in year four, and 100% in year five.
The bill also has large implications for goods entering the U.S. under Section 321 of the Tariff Act of 1930—so-called de minimis shipments—including shipments not of Chinese origin. According to the bill’s text, all goods entering from “covered nations” as defined under Section 4872 of title 10 of the United States Code would not be eligible for de minimis treatment. Covered nations include not only the PRC, but also North Korea, the Russian Federation, and the Islamic Republic of Iran. Additionally, the bill would require customs brokers for other de minimis shipments.
Finally, the bill would establish a trust fund under the auspices of the U.S. Department of the Treasury to compensate farmers and manufacturers injured by any possible Chinese retaliation to U.S. trade actions, the money for which is to be provided from the increased duties on Chinese goods. Such an arrangement has some precedent under U.S. law. The Continued Dumping and Subsidy Offset Act of 2000 (“CDSOA”), which was repealed in 2006, distributed duties assessed from an antidumping or countervailing duty order to affected domestic producers. While the CDSOA was relatively quickly repealed and subject to a number of WTO-disputes, eligible U.S. producers were able to receive significant compensation for harm from unfairly imported goods while the law was in effect.
Crowell & Moring continues to monitor developments in the trade and customs spaces and their impact on businesses.