The "Restoring Trade Fairness Act" suspends normal trade relations with China, increases tariffs on Chinese goods, and directs tariff revenue to compensate affected U.S. producers and bolster national defense. It also modifies WTO commitments to allow for the denial of normal trade relations to other members without violating duty concessions.
Tom Cotton
Senator
AR
The "Restoring Trade Fairness Act" suspends normal trade relations with China, leading to increased tariffs on Chinese goods, with a phased implementation over five years, and directs the President to revise the Harmonized Tariff Schedule of the United States (HTS) to include duty rates specifically for goods from the People's Republic of China. It also directs the United States Ambassador to the World Trade Organization to change the United States Schedule of Concessions on goods to allow the United States to deny normal trade relations to a WTO member if warranted, without violating the duty concessions in the Schedule. Revenue generated from these tariffs will be allocated to a trust fund to compensate U.S. producers affected by Chinese retaliatory measures and to bolster national defense. The bill also amends Section 321 of the Tariff Act of 1930 to prohibit duty-free or tax-free admission for articles originating from covered nations, even if they fall under the $800 limit.
China Trade Ties Cut: New Bill Hikes Tariffs, Triggers Retaliation Fears
The "Restoring Trade Fairness Act" (short title) is essentially hitting the 'reset' button on trade with China. Instead of the usual lower tariffs most countries get, Chinese goods will face significantly higher taxes when entering the U.S., starting the day after this bill becomes law (SEC. 3). This is a big deal because it could make everything from electronics to clothing more expensive. The bill's justification? Congress believes that normal trade relations with China have cost the U.S. jobs, factories, and intellectual property (SEC. 2).
Tariffs Going Up... Way Up
This bill doesn't just tweak tariffs; it rewrites the rulebook. The President is directed to jack up tariffs on Chinese goods to match the old "column 2" rates (SEC. 4) – think of these as the high rates reserved for countries without normal trade relations. Minimum rates are set at 35% for many goods, and a whopping 100% for certain items (SEC. 4 & 10), and those rates get phased in over five years. Plus, the President gets broad power to hike tariffs even higher to counter "unfair trade practices" or if the U.S. gets too dependent on Chinese imports (SEC. 4). For example, a small business owner who currently imports components from China could see their costs skyrocket, potentially forcing them to raise prices for their customers.
Retaliation Risks and a "Made in America" Push
If China retaliates – which is a real possibility – the bill sets up a fund to compensate affected U.S. businesses (SEC. 8). This fund, filled with the new tariff revenue, will prioritize buying up agricultural goods, semiconductors, and even aircraft parts that were meant for export to China but got blocked. Any leftover cash goes to the Department of Defense to buy munitions, specifically those deemed necessary to counter potential Chinese aggression in the Indo-Pacific region (SEC. 8). This could mean a boost for certain domestic manufacturers, but it also signals a shift towards a more protectionist, potentially confrontational stance.
The "United States Value" Headache
The bill also changes how imported goods from China are valued, switching to something called "United States value" (SEC. 5). This means the price will be based on what similar goods sell for inside the U.S., not the declared import price. This could create a lot of paperwork and potential disputes for importers, and it's unclear how easily this new system will be enforced. The bill also removes the duty-free limit for small shipments from "covered nations" (SEC. 7), meaning even those under-$800 packages from China will now be taxed. This is a significant change that could affect individuals and small businesses that rely on those imports.