S. 206 — Restoring Trade Fairness Act

This section states congressional findings on U.S. normal trade relations status (granted to all countries except Belarus, Cuba, North Korea, and Russia), duties under columns 1 and 2 of the Harmonized Tariff Schedule of the United States, China's permanent normal trade relations status since 2001, the expansion of informal entries under section 321 of the Tariff Act of 1930 (19 U.S.C. 1321), China's WTO noncompliance, U.S. trade deficits and manufacturing job losses attributable to China, and the lack of WTO mechanisms to suspend noncompliant members.

This section suspends normal trade relations (NTR) treatment for products of the People's Republic of China beginning on the day after the date of enactment. (NTR treatment, granted by P.L. 106-286 upon China's WTO accession, allows such products to enter the United States at the same lower tariff rates as products from other WTO members; thus, without NTR, Chinese products will face higher Column 2 tariff rates under the Harmonized Tariff Schedule.)

This section directs the President to revise the Harmonized Tariff Schedule of the United States (HTS) to establish rates of duty applicable only to articles from the People's Republic of China, based on column 2 rates as of the day before enactment and modified as follows: (1) ad valorem or free rates below 35% ad valorem are increased to 35% ad valorem, or to 100% ad valorem for articles specified in section 10; and (2) specific or compound rates equivalent to less than 35% ad valorem are increased to the equivalent of 35% ad valorem, or to 100% ad valorem for section 10 articles. (Column 2 rates generally apply to imports from countries lacking normal trade relations with the United States, such as Cuba and North Korea.) The section further requires annual presidential proclamations to adjust specific and compound rates for inflation based on the increase in the Consumer Price Index for All Urban Consumers since calendar year 1930 (with the first adjustment effective January 1, 2024, on a retroactive basis, and subsequent adjustments effective January 1 of the following year; ignoring increases below 1%). It phases in the duty increases over five years from enactment: (1) 10% after 180 days; (2) 25% after two years; (3) 50% after four years; and (4) 100% after five years. The section requires the U.S. International Trade Commission to submit annual information to the President on ad valorem equivalents for certain column 2 specific or compound rates.

This section establishes a 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 other valuation methods in the Tariff Act of 1930. Importers must submit a statement of this value to U.S. Customs and Border Protection (CBP) upon entry, and CBP must verify the value and report to the U.S. International Trade Commission (ITC) either a determination of its accuracy or a revised value.

This section directs the United States Trade Representative to instruct the United States Ambassador to the World Trade Organization to modify the U.S. Schedule of Concessions on goods. (Thus, the United States may increase duty rates on imports from specific WTO members—denying them normal trade relations status as determined warranted—without breaching its bound tariff concessions.)

This section amends the de minimis exemption in Section 321(a)(2)(C) of the Tariff Act of 1930 (19 U.S.C. 1321), which allows duty- and tax-free entry for articles valued at $800 or less, to prohibit such entry for any article 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 15 days after such date.

This section establishes in the Treasury a trust fund consisting of amounts equivalent to duties collected on articles imported from the People's Republic of China, to be transferred quarterly from the general fund beginning in FY2024, 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 Chinese restrictions on U.S. imports in retaliation for measures under this Act, with transfers prioritized as follows: (1) to the Secretary of Agriculture, upon certification of insufficient Commodity Credit Corporation (CCC) borrowing authority, to purchase agricultural commodities intended for but not exported to China that producers could not sell elsewhere at expected prices, with annual certifications to Congress beginning September 30, 2024; (2) after agricultural transfers, to the Secretary of Commerce to purchase unsold articles from semiconductors/related equipment, mineral fuels/oils/distillation products, and aircraft/aircraft parts/services; (3) after the above, to the Secretary of Commerce for other unsold articles; and (4) any fiscal year-end remainder to the Department of Defense to acquire Harpoons or other anti-ship cruise missiles, loitering munitions, shallow water naval mines, or ground-launched anti-ship missiles.

This section authorizes appropriations to the United States International Trade Commission (USITC) for hiring additional employees and improving information technology: $3.6 million for FY2025 and $3 million for FY2026 and each fiscal year thereafter.

This section specifies the covered articles as (1) all articles classified under section V of the Harmonized Tariff Schedule (HTS) (i.e., mineral products in chapters 25-27); and (2) approximately 50 specific HTS subheadings for inorganic chemicals (e.g., zinc oxide; chromates of zinc or lead), radioactive elements and isotopes (e.g., uranium enriched in U235; tritium; actinium), enriched isotopes (e.g., boron-10; lithium-6; helium-3), and pharmaceutical products (e.g., amphetamines; psychotherapeutic agents; antidepressants; antihistamines; quinoline drugs).