U.S. Plans to Revoke China's Permanent Normal Trade Relations

According to reports from U.S. media, Republican lawmakers in the House of Representatives are drafting legislation that may revoke China's status as a country with Permanent Normal Trade Relations (PNTR).

On November 11, Chinese Foreign Ministry spokesperson Lin Jian addressed the issue during a regular press briefing. When asked by a Bloomberg journalist about the potential legislation, Lin emphasized that the U.S. granted China PNTR status in 2001 under the terms of China's accession to the World Trade Organization (WTO). “Certain U.S. politicians are attempting to turn back the clock, dragging U.S.-China trade relations back to the Cold War era. This contravenes WTO rules and will only harm the shared interests of both countries and disrupt the global economy,” Lin said. “We urge the relevant U.S. lawmakers to abide by WTO regulations and cease actions that harm others and bring no real benefit,” he added.

The U.S. first granted China PNTR status in 1994 during President Clinton's administration, extending what was previously called Most-Favored-Nation (MFN) status. In the 1980s, the U.S. government reviewed China's MFN status annually. Although MFN status was suspended in 1990, President George H.W. Bush vetoed the move, and the U.S. Congress continued to review it each year until the Clinton administration granted permanent trade status in 1994. 

In 1998, the U.S. renamed MFN status as Normal Trade Relations. PNTR was officially granted to China in 2001, paving the way for its entry into the WTO. Since then, several bills have been introduced to revoke China's PNTR status, including one by Representative Chris Smith, with co-sponsors like Representative Tom Tiffany and Democrat Tom Suozzi. Senators Tom Cotton, Rick Scott, and Jim Inhofe also introduced similar bills in the Senate. In September 2024, Republicans Tom Cotton, Marco Rubio, and Josh Hawley introduced a new bill to cancel China's PNTR status, marking the third consecutive year that lawmakers have moved to remove this trade benefit. Removing PNTR has also been included in the 2024 Republican campaign platform.

Ending PNTR with China would impose significant economic repercussions on Chinese exports to the U.S. Most notably, the average tariff rate for Chinese goods would rise from the current 2.2% to over 60%, greatly affecting the price competitiveness of Chinese exports in the U.S. market. Estimates suggest that around 48% of Chinese exports to the U.S. are already subject to additional tariffs. The removal of PNTR would further expand this scope.

Without PNTR, tariffs on Chinese imports would shift from the current column one rate to column two, substantially increasing duties on China's top 20 export categories to the U.S., including machinery and parts, motor vehicle components, semiconductor devices, minerals, and metal products.