PNTR Bill Author Says Non-Strategic Goods Should Have Lower Rate
House Select Committee on China Chairman John Moolenaar, R-Mich., said his vision of revoking Permanent Normal Trade Relations status for China is not to move Chinese goods to Column 2, but to create a new tariff schedule just for Chinese goods, with high rates reserved for strategic goods. Moolenaar, who has sponsored legislation to end PNTR (see 2501240061), described the approach he'd like to see at a Center for a New Security conference June 3.
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He said that a 100% tariff should be applied to "critical minerals or advanced technology, battery technologies ... EVs, areas that we want to make sure that we don't further become dependent on China."
During the Biden administration, Section 301 tariffs on EVs were already hiked to 100%; ship-to-shore cranes, lithium-ion electric vehicle batteries, battery parts for non-lithium-ion batteries, and some critical minerals had Section 301 duty rates set at 25% in the same action (see 2405140008).
Moolenaar said that for what he called "just regular consumable goods that you know don't need to be considered strategic and that we don't have to worry about whether we're dependent on China," there would be a lower tariff rate.
In his bill, the minimum tariff would be 35% for Chinese imports, but unlike the current system, where the 30% emergency tariff is added to 7.5% or 25% Section 301 tariffs and to MFN rates, that would be an all-in rate.
His bill also would phase in the new duties slowly, beginning six months after enactment, and the full tariff increase would not come for five years.
Congress taking some leadership in this area would be helpful," Moolenaar said at the event.
Rep. Ritchie Torres, D-N.Y., who also serves on the House Select Committee on China, said that while it's a major weakness that domestic ship-building capacity has withered, "I feel like we have to come to grips with the fact that the United States alone cannot out-manufacture China because it has a population that is four times larger than ours.
"And it has ecosystems and supply chains that have been developed over the course of decades, and we cannot easily replace or replicate those supply chains."
Torres said the U.S. must build on its alliances, and use friendshoring with South Korea and Japan to "have a fighting chance" to match Chinese shipbuilding.
The moderator asked Torres about China's dominant position in critical minerals, rare earth magnets made with those minerals, and EV batteries. The moderator noted that China has restricted exports of those magnets as part of the trade war, and said that if they are totally cut off, it could halt U.S. auto assembly. The magnets are not only in EVs, but are in many automatic features in cars, such as windows and automatic-adjusting seats.
"You know, we've been dangerously complacent, and China has essentially a chokehold on both the defense and decarbonization of the United States, because clean energy technology and military weaponry depend heavily on credible import inputs that are either primarily or even exclusively sourced from China," Torres responded.
"China's not practicing free market capitalism and free trade. It's practicing mercantilism. It's not competing. It's cheating. Whenever the United States has attempted to invest in a domestic mining, processing and refining capacity, China will overproduce, flood the market with exports, undercut our competitors, make refining and processing uninvestable, commercially unviable here in the United States," he added.
"Maybe we should have our own international champions that are guaranteed predictable pricing and predictable procurement that will protect them from the predatory pricing of China. And just like we have a strategic reserve for petroleum, we ought to have a strategic reserve for critical minerals."