President Bush Thursday renewed China's most-favored-nation trade benefits for one year, brushing aside critics who favored a hard line a year after the Beijing government's crackdown on pro-democracy demonstrators.
"I did not want to hurt the Chinese people," Bush said. "I concluded that it is in our best interests and the interest of the Chinese people to continue China's trade status. Not to do so would hurt the United States."Most favored-nation status gives China the same benefits, including lowest-possible tariffs, that the United States extends to its major trading partners. Losing that status would subject some $12 billion in Chinese products - last year's level of imports - to sharply rising tariffs.
Bush also noted that China buys about $6 billion a year in U.S. products, including aircraft, wheat, chemicals, lumber and other products. "Lose this market and we lose American jobs," he told a White House news conference.
Congress can block the administration's move only by enacting a "resolution of disapproval," which is subject to presidential veto. It thus would take two-thirds majorities in both chambers to override Bush's decision.
House Speaker Thomas S. Foley, D-Wash., said shortly after Bush's announcement, "I think he faces some very severe problems here. . . . At the present time, I would say there are not the votes to approve it."
Foley said there should have been conditions attached to any extension, to prod China toward reforms. However, an administration official said in advance of Bush's remarks that the trade status either must be renewed each year or withdrawn, that there is no way to make it provisional.
In an opening statement before taking questions from reporters at the White House, Bush stressed that his decision was not meant to condone the policies of the government of China in suppressing the pro-democracy movement there.
In answer to a question, he said, "I don't think this is a reward to Beijing."
Bush said other sanctions against the Chinese government would remain in place and called anew on Beijing to improve its human-rights record.
He vehemently rejected assertions the move sent the wrong signal to leaders of the pro-democracy movement.
"It says that economic contacts are the best way to keep the economic reforms going," Bush said. "It says that the more economic contacts we have with China the more they are going to see the fruits of free-market economies. It should send no other message than that isolation is bad and economic involvement is good."
Withdrawing China's most-favored-nation trade status probably would have sent tariffs soaring on China-made goods, including about $8.5 billion in mostly toys and textiles re-exported to the United States by Hong Kong. The Hong Kong government, which lobbied hard against withdrawing the most-favored-nation benefits, contends the move would send tariffs as much as 70 percent higher.