Republican Senators Introduce Bill to Counteract China’s Influence

Republican Senators Introduce Bill to Counteract China’s Influence

Republican senators, led by Tom Cotton (R-Ark.), Marco Rubio (R-Fla.), and Josh Hawley (R-Mo.), have proposed a comprehensive bill that aims to curb Chinese influence through significant trade reforms. The bill seeks to eliminate Permanent Normal Trade Relations (PNTR) with China and double tariffs on goods imported from the Chinese Communist Party (CCP).

Tariff Hikes and Strategic Growth

Over a five-year period, the proposed bill would increase tariffs on imports deemed “strategic” to national security by 100%. This measure aims to bolster the domestic market for security-related goods and reduce dependence on foreign sources. Furthermore, non-strategic goods would face a minimum tariff hike of 35%.

Presidential Authority and Quota Controls

The bill empowers the president to impose additional tariffs, quotas, and bans on specific Chinese goods. It also eliminates the “de minimis treatment” for China, which allows certain imports to enter the country duty-free. The revenue generated from these measures would be allocated to farmers and manufacturers affected by Chinese retaliation, the purchase of munitions for potential Pacific conflicts, and debt reduction.

Ending Favored Trade Status

Senator Cotton emphasized that the bill’s purpose is to “end the Chinese Communists’ leverage over our economy.” He believes that granting China PNTR status “was one of the most catastrophic decisions that our country has ever made.” The bill’s co-sponsors, Rubio and Hawley, echoed this sentiment, arguing that China has exploited America’s working class and outsourced manufacturing jobs overseas.

Economic and Global Implications

The proposed bill aligns with former President Trump’s focus on increasing tariffs on Chinese goods. Economists project China’s GDP to grow by nearly 5% in 2024, while the U.S. is forecasted to have half that growth rate. The legislation also comes in the wake of China’s new export controls on minerals critical to the U.S. defense industry, such as antimony.

Historical Context and Biden’s Tariff Plan

In 2000, the U.S. Congress voted to grant China PNTR status, significantly altering trade relations. Between 2001 and 2021, the value of Chinese imports quadrupled. The Biden administration has also recently increased tariffs on certain Chinese-made products, doubling the rate for electric vehicles and raising it by 50% for solar cells and 25% for EV batteries.

Expected Retaliation and Potential Impact

China is likely to retaliate with tariffs on U.S.-made goods. The bill’s proponents argue that the potential economic consequences are outweighed by the need to protect national security, reduce Chinese influence, and revive American manufacturing.