The United States currently has a trade policy with China that is considered a permanent normal trade status, but the House Select Committee on the Chinese Communist Party released a statement considering a change in the relationship.
The report released by the House Select Committee includes three main policy objectives. The first is a reset of the terms of U.S.-China trade engagement. The second is preventing the massive influx of U.S. capital and technology in the Chinese military. The last objective would be increase the economic might of the United States allies.
The committee also recommended an additional 150 policy initiatives including new tariffs, having American companies publicly disclose any ties they have to China, and increasing security measures for U.S. research.
“Since its accession to the World Trade Organization in 2001, the CCP has pursued a multi-decade campaign of economic aggression against the United States and its allies in the name of strategically decoupling the People’s Republic of China (PRC) from the global economy, making the PRC less dependent on the United States in critical sectors, while making the United States more dependent on the PRC,” the report detailed. “In response, the United States must now chart a new path that puts its national security, economic security, and values at the core of the U.S.-PRC relationship.”
The most significant change detailed in the report is the revocation of China’s permanent normal trade relations (PNTR) status.
The Heritage Foundation explained “countries granted PNTR status, once called ‘most favored nation’ status, receive preferential trade treatment such as lower tariffs and fewer barriers such as import quotas.”
When China became a member of the World Trade Organization (WTO) in 2001, the United States granted them PNTR status.
“WTO Members understood that China intended to dismantle existing state-led, mercantilist policies and practices, and they expected China to continue on its then-existing path of economic reform and successfully complete a transformation to a market-oriented economy and trade regime,” the committee’s reported stated. “More than 20 years later, the PRC has failed to live up to these commitments and to the foundational principles of the WTO — open, market-oriented, non-discriminatory treatment.”
The report ultimately recommended the U.S. “move the PRC to a new tariff column that restores U.S. economic leverage to ensure the PRC abides by its trade commitments.” American companies would disclose “material ties to the CCP, supply chain, profit from the PRC and the company’s preparation for and ability to withstand the sudden loss of market access that could result from a conflict in the region.”
Regarding the massive theft of U.S. intellectual property, ultimately fueling China’s military, the report would require “all federal research funding applicants to disclose details about past, present and pending relations and interest with foreign governments, foreign government-controlled entities, or entities located in foreign adversary countries, in the past five years for themselves and any key member of their team who will be involved in fundamental research supported by the grant.”