THE CHINA TRAP — The trade politics of 2024 started to take shape this week — and they will be rough for President Joe Biden and the Democrats to navigate. On Monday, POLITICO reported that the House Select Committee on China is likely to recommend revoking China’s normal trade status, which the U.S. granted in 2000 in exchange for Beijing agreeing to make reforms to join the World Trade Organization. Revoking Permanent Normal Trade Relations — or PNTR, as it’s known in Washington — would be a veritable sea change for the U.S.-China relationship, meaning significantly higher tariffs on hundreds of billions of dollars worth of imports. And it would be an earth-shaking event for the entire global economy, breaking international trade rules and undermining the world economic system set up after the last Cold War. Don’t get too anxious yet: the recommendation itself won’t mean a bill will hit the congressional floor immediately. But bipartisan endorsement of a formerly fringe policy position from the high-profile committee shows how quickly the idea has moved into the mainstream — and just in time for election season. Revoking China’s trade status was the position of lonely cranks as recently as a few years back. Even former President Donald Trump didn’t go so far as to push for its repeal during his time in office. But now Trump has upped the ante, endorsing the policy in a Truth Social video back in February. And his trade chief, Robert Lighthizer, also pushed lawmakers on the Select Committee hard this year to recommend revoking the trade status. A number of lawmakers have introduced revocation bills, and some senior trade legislators like outgoing Democratic Rep. Earl Blumenauer have said they consider their votes to grant China normal trade status a mistake. Behind the scenes, Trump allies are trying to set a trap for Biden — pressing Republican lawmakers to bring a bill to repeal China’s trade status to the floor next year, confident it will at least pass the GOP-controlled House. That would put the president and Senate Democrats in a bind. Oppose revoking China’s trade status, and Democrats risk being painted as soft on Beijing and allies of globalization across midwestern swing states where tariffs are largely popular and sentiment toward China is decidedly negative. That’s a risk not just to Biden, but his party’s narrow control of the Senate, where Democrats are defending seats in Wisconsin, Ohio, Pennsylvania and Michigan — all Rust Belt states that swung to Trump in 2016 on the back of his anti-trade rhetoric. “That’s what I’ve been telling people — make them vote!” said one of the Trump allies pressing lawmakers, granted anonymity because they were not authorized to speak on the matter. “If you have to sit down and say ‘I’m on China’s side’ and then you have to spend your career defending that, it’s not easy.” The other option is not much better for Democrats. If they endorse repealing China’s trade status, they risk triggering higher inflation with tariffs and stock market volatility as Wall Street reacts to the move — exactly the type of economic upheavals you don’t want when you’re running on “Bidenomics.” Already, there are signs that swing state Democrats are worried. Brown and Wisconsin Sen. Tammy Baldwin, both of whom face competitive reelection campaigns next year, refused to take a position on repealing China’s trade status this week — even though they both opposed granting it decades ago when they were in the House. “There’s a difference between blocking it in the first place and then peeling it back many, many years after it was granted,” said Baldwin. Other senior Democrats, like Senate Finance Committee Chairman Ron Wyden and Virginia Sen. Tim Kaine (also facing reelection) took similar wait-and-see positions. They’ll have to get their ducks in a row quickly. While the actual words “permanent normal trade relations” aren’t likely to pass Trump’s lips on the trail, those close to his campaign say he is sure to make higher tariffs on China a central plank in his economic platform for the heartland next year. “Almost certainly you’ll see [rhetoric that] we’ve got to get higher tariffs on China, [and] stop them from stealing our stuff,” said the Trump official. “We began that process in the first term, we’re going to do it again.” Welcome to POLITICO Nightly. Reach out with news, tips and ideas at nightly@politico.com. Or contact tonight’s author at gbade@politico.com or on X (formerly known as Twitter) at @GavinBade.
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