Trump transition team members may have already drafted an executive order hiking tariffs on Chinese imports, said Peterson Institute for International Economics fellow Mary Lovely, during a webinar moderated by former European commissioner and now PIIE fellow Cecilia Malmstrom.
Permanent normal trade relations (PNTR)
Permanent normal trade relations (PNTR) is a U.S. designation of trade status with foreign countries. The concept replaced the Most Favored Nation designation, also known as normal trade relations in U.S. law, with the passage of the Jackson-Vanik amendment to the Trade Act of 1974. A country with PNTR status cannot be treated differently than any other country with such a status with respect to international trade. Cuba and North Korea are the only countries which currently do not receive NTR status, but Russia’s and Belarus’s PNTR status was suspended in 2022.
The U.S.-China Economic and Security Review Commission, in its annual report to Congress, said that ending de minimis for all e-commerce is one of its top 10 recommendations, and said that if Congress passes such a law, it should provide CBP adequate resources to implement and enforce the change.
Rep. Jimmy Panetta, D-Calif., issued a release Oct. 25 asking his colleagues to change the law so that Kazakhstan can receive permanent normal trade relations, as Kyrgyzstan, Georgia and other former Soviet states do. Kazakhstan goods are subject to Column 1 tariffs, but that status must be renewed annually.
Republican presidential candidate Donald Trump is likely to react “more negatively and more directly” than his Democratic rival, Vice President Kamala Harris, to the EU’s plan to start taxing carbon-intensive imports, a former U.S. trade official said Oct. 17.
Three Republican senators reintroduced a bill to end permanent normal trade relations with China, and to set tariff rates of at least 35% for Chinese goods, if the Column 2 tariffs are not that high, as well as 100% tariffs on 38 pages of Harmonize Tariff Schedule lines enumerated in the bill.
Economists at the Peterson Institute for International Economics said that if the U.S. were to move all Chinese imports into Column 2 of the tariff schedule, removing permanent normal trade relations status, it would increase inflation by four-tenths of a percent if China were to retaliate, and it would hurt manufacturing the most -- the area politicians most want to protect.
A joint statement of the Office of the U.S. Trade Representative and Kazakhstan's president, released almost a week after USTR Katherine Tai's visit to Kazakhstan, noted that Kazakhstan values the Generalized System of Preferences benefits program as a way to diversify the destinations of its exports. The GSP has been expired for more than three years, but Tai said she generally supports Congress' efforts to "revitalize and renew the Generalize System of Preferences program." The statement also noted that Kazakhstan would like permanent normal trading relations with the U.S.; it's still subject to the Jackson-Vanik amendment, as are other former Soviet Union republics Azerbaijan, Tajikistan, Turkmenistan and Uzbekistan. The U.S. Chamber of Commerce supports PNTR for Kazakhstan (see 2001090055).
House Republican conservatives want to end Permanent Normal Trade Relations with China and have introduced a bill that urges the U.S. trade representative to negotiate free trade agreements with Taiwan, the Philippines, Indonesia, Thailand, Malaysia, New Zealand, and the U.K. so that importers can have alternatives to Chinese suppliers at a lower cost.
Congress should remove permanent normal trade relations status for China, but rather than move Chinese imports into Column 2, it should create a China-specific tariff schedule "that restores U.S. economic leverage to ensure that the [Chinese government] abides by its trade commitments and does not engage in coercive or other unfair trade practices and decreases U.S. reliance on [Chinese] imports in sectors important for national and economic security," the House Select Committee on China wrote as one of its dozens of legislative recommendations in its "Strategy to Win America's Economic Competition with the Chinese Communist Party." The report, released Dec. 12, also recommended:
Eliminating permanent normal trade relations (PNTR) with China would “leave a lasting scar” on the U.S. economy, costing each U.S. household $11,000 in real income over the period 2024 to 2028 and reducing competition and efficiency over the long term, according to a report released by the U.S.-China Business Council on Nov. 9.