H.R. 694 — Restoring Trade Fairness Act

This section states congressional findings concerning U.S. normal trade relations status (extended to all WTO members except Belarus, Cuba, North Korea, and Russia via column 1 rates of the Harmonized Tariff Schedule); China's permanent normal trade relations status since 2001; the section 321(a) de minimis exemption (19 U.S.C. 1321(a)), which disregards duties under $20 or specified amounts, admits articles free of duty up to $100-$800 retail value per person per day, and waives collections under $20; China's WTO noncompliance, intellectual property theft, and contribution to U.S. trade deficits exceeding $1 trillion annually; and the lack of WTO mechanisms to suspend noncompliant members.

This section suspends normal trade relations (NTR) treatment—previously known as most-favored-nation (MFN) status—for products of the People's Republic of China, effective the day after enactment. (Thus, such products will be dutiable at higher non-NTR tariff rates pursuant to the Harmonized Tariff Schedule.)

This section directs the President to proclaim revisions to the Harmonized Tariff Schedule of the United States (HTS) establishing rates of duty applicable only to articles from the People's Republic of China, set at column 2 (non-preferential) rates as of the day before enactment, modified as specified below and, if applicable, adjusted annually for inflation. (Column 2 rates apply higher duties to imports from countries lacking normal trade relations with the United States.) The modifications include the following: (1) for ad valorem duties or free rates, increasing any rate below 35% ad valorem to 35% ad valorem, or below 100% ad valorem to 100% ad valorem for articles specified in section 10; (2) for specific or compound rates, increasing any rate equivalent to less than 35% ad valorem (after inflation adjustment) to the equivalent of 35% ad valorem, or less than 100% ad valorem to the equivalent of 100% ad valorem for articles specified in section 10. Inflation adjustments to specific and compound rates use the increase in the Consumer Price Index for All Urban Consumers since calendar year 1930 as the base, with the first adjustment applying to entries on or after January 1, 2024 (including retroactive collection rules issued within 180 days of enactment), and subsequent adjustments applying January 1 following each annual proclamation (ignoring increases below 1%). The section requires phase-in of the duty increases: 10% on or after 180 days post-enactment; 25% on or after two years post-enactment; 50% on or after four years post-enactment; and 100% on or after five years post-enactment. This section further requires the U.S. International Trade Commission to submit annual reports to the President by July 1 on ad valorem equivalents for applicable specific or compound column 2 rates.

This section establishes a mandatory requirement that merchandise imported from the People's Republic of China be appraised for customs purposes on the basis of its United States value (i.e., the price at which the merchandise or similar merchandise is freely offered for sale, packed ready for delivery, in the principal U.S. market to all purchasers at the time of importation), notwithstanding any other provision of law. (As background, U.S. customs valuation normally follows a statutory hierarchy prioritizing the transaction value—typically the invoice price paid to the foreign seller—with deductive value based on U.S. resale price used only if transaction value is unavailable.) It further requires importers to submit a statement of the United States value to U.S. Customs and Border Protection (CBP) upon entry and directs CBP to verify the value and report to the United States International Trade Commission a determination of its accuracy (with a revised value if inaccurate).

This section directs the United States Trade Representative to instruct the U.S. Ambassador to the World Trade Organization to modify the U.S. Schedule of Concessions on goods (i.e., bound maximum tariff rates applicable to WTO members). This enables the United States to deny normal trade relations status to specific WTO members—by raising applicable duty rates on their imports—without breaching its tariff concessions.

This section amends the de minimis duty exemption under section 321(a)(2)(C) of the Tariff Act of 1930 (19 U.S.C. 1321(a)(2)(C))—which allows duty-free entry for imported articles valued at $800 or less—to prohibit such exemption for articles originating in a covered nation (as defined in 10 U.S.C. 4872). The amendments take effect on the date of enactment and apply to articles entered, or withdrawn from warehouse for consumption, on or after the date that is 15 days after enactment.

This section establishes a trust fund in the U.S. Treasury, funded by quarterly transfers from FY2024 onward of amounts equivalent to duties collected on imports from the People's Republic of China (PRC), with excess amounts invested in U.S. obligations and interest credited to the fund. Amounts in the trust fund are available, as provided in advance in appropriations acts, to compensate U.S. producers for lost revenue from PRC import restrictions retaliating against measures taken under this Act (i.e., commodities or articles intended for PRC export that were not sold there and could not be sold elsewhere at a fair price after good faith efforts). Transfers from the trust fund occur in the following priority order: (1) to the Secretary of Agriculture, upon certification of insufficient Commodity Credit Corporation (CCC) borrowing authority (with annual certifications beginning September 30, 2024), to purchase affected agricultural commodities via CCC facilities; (2) to the Secretary of Commerce to purchase affected articles from critical sectors (i.e., semiconductors/related equipment, mineral fuels/oils/distillation products, and aircraft/parts/services); (3) to the Secretary of Commerce to purchase other affected articles; and (4) any fiscal year-end remainder to the Department of Defense to acquire anti-ship cruise missiles (e.g., Harpoons), loitering munitions, shallow-water naval mines, or ground-launched anti-ship missiles.

This section authorizes appropriations to the U.S. International Trade Commission (ITC) to hire additional employees and improve information technology: $3.6 million for FY2025 and $3 million for FY2026 and each fiscal year thereafter.

This section specifies the articles covered as (1) all articles classified under section V of the Harmonized Tariff Schedule of the United States (HTS) (i.e., mineral products in chapters 25-27), and (2) certain inorganic chemicals (e.g., zinc oxide, chromates, colloidal precious metals), radioactive elements and isotopes (e.g., uranium, tritium, helium-3), and pharmaceutical products (e.g., amphetamines, psychotherapeutic agents, antihistamines) under listed HTS subheadings primarily in chapters 28 and 29.