And the business lobbies aren’t having it.
The House of Representatives’ Select Committee on the Chinese Communist Party (CCP) is preparing to recommend the United States revoke China’s permanent normal trade relations (PNTR) status, which keeps the tariff rate on most Chinese imports to the United States predictable and low.
This is per Politico, first reported on Monday. By Tuesday morning, the outlet had even more quotes from international business lobbies and a Trump White House economic adviser arguing that doing so – revoking PNTR – would crater the economy and beggar the average American household via huge price spikes in consumer goods. That would happen, the argument goes, because the U.S. and Chinese economies are so inextricably linked that dissolving the connection even partially would inflict incredible economic suffering.
Left unsaid is that critics like the U.S.-China Business Council and National Retail Federation are behooved to make this argument. It’s in their financial interest that these relations are insolvent.
Left unsaid is these lobbies represent the same pool of businesses that lobbied for China PNTR back in the Clinton administration and won it, which granted them the ability to offshore production without the worry that fluctuating tariff rates would impede access to a potentially huge Chinese consumer market and (just as important) China’s enormous pool of cheap, exploitable labor.
Left unsaid is the resulting offshoring and flood of Chinese import competition decimated American manufacturing in the years that followed.
And also left unsaid is theirs isn’t an argument based on fairness. The coverage of the debate around PNTR often glosses over the fact that more than one arm of the U.S. government has found the Chinese government hasn’t lived up to the agreements upon which granting these favorable tariff rates hinged back in 2000.
“A generation after PNTR was granted, China’s failure to comply with their promises is clear, well substantiated and pervasive,” wrote U.S.-China Security and Economic Review Commission members Michael Wessel and Robin Cleveland this summer. Reviews from the office of the United States Trade Representative regularly reach the same conclusion.
What matters to these lobbies is that the Apples, Amazons, Targets and Walmarts of our economy have a lot of money tied up in selling Americans imported Chinese goods.
And the response of these lobbies is telling. Politico correctly notes the committee is not empowered to advance legislation, and there are no indications that the committees that have that power plan to take this proposal up. It would have to pass both the U.S. House and Senate and then be signed by President Biden.
But the simple fact that it’s being talked about, and its critics are so loudly shouting it down, is indicative of the sea change we’ve experienced regarding U.S.-China economic relations in recent years. And voters agree: China trades unfairly, and it’s inappropriate that we grant the Chinese government the same trade status that we grant to allies like the United Kingdom or Japan.
In case you were wondering what we think here at the Alliance for American Manufacturing: When our own Scott Paul testified before the House Select Committee on the CCP back in February, revoking PNTR was among his top recommendations for Members of Congress. And Paul also got the chance to offer his thoughts to Politico, telling the outlet: “It’s rare that Congress has the opportunity to undo a mistake that was made 20, 25 years ago. I think this is one of those opportunities to seize that moment.”
The Politico article is paywalled here.