In 1996, on the House floor, Rep. Nancy Pelosi (D-CA) assailed a then-bipartisan plan to give Most Favored Nation (MFN) trade status to China, arguing that while the U.S. has low tariffs on China-made goods, China has high tariffs on American goods.
While debating opening U.S. free trade with China by giving the communist country MFN status, Pelosi made clear she opposed the plan, noting the growing trade deficit and how it was leading to economic devastation for Americans.
“Today, members of Congress will be asked to set down a marker: How far does China have to go? How much more repression, how big a trade deficit and loss of jobs for the American worker, and how much more dangerous proliferation has to exist before members of this House of Representatives will say, ‘I will not endorse the status quo?’” Pelosi said:
If we just want to take up this issue on the basis of economics alone, indeed, China should not receive Most Favored Nation status for several reasons that I’d like to go into now. I’d like to call the attention of our colleagues to this chart on the status quo that the business community is asking each and every one of you to endorse today. Right now, we have a $34 billion trade deficit with China … it will be over $40 billion for 1996. Since the Tiananmen Square massacre, this figure has increased 1,000 percent, from $3.5 billion then to about $34 billion now. In terms of tariffs, it’s think it’s interesting to note that the average U.S. MFN tariff on Chinese goods coming into the United States is 2 percent whereas the average MFN tariff on U.S. goods going into China is 35 percent. Is that reciprocal? On exports, China only allows certain U.S. industries into China and therefore only 2 percent of U.S. exports are allowed into China. On the other hand, the U.S. allows China to flood our markets with a third of their exports and that will probably go to over 40 percent and it’s limitless because we have not placed any restrictions. [Emphasis added]