Decoupling. Derisking. Strategic competition. Call it what you will, but politics, public policy, and many private sector actors have shifted decisively away from deepening economic engagement with China.
We’ve seen some significant executive actions from the White House, a new Congressional committee, and heaps of rhetoric and analysis from the punditry all directed at reversing America’s jobs and technology giveaways to the Chinese Communist Party (CCP) that have persisted for over twenty years.
The U.S. House of Representatives has its Select Committee on China that regularly interviews Chinese critics, skeptics, and dissidents. And leadership in the U.S. Senate has announced plans to put together an economic competition bill to build on legislation debated in the last Congress.
This is all valuable work. But while there is no shortage of worthwhile proposals to realign the U.S.-China economic relationship, one in particular would reset our deeply skewed trade arrangement to its rightful place: suspending or revoking China’s permanent normal trade relations, or PNTR.
This suspension or revocation would allow Congress to once again determine an appropriate tariff rate on all Chinese imports into our country, beyond the sweeping Section 301 tariffs that have been in place since the Trump administration.
PNTR is a U.S. legal designation given to some foreign trading partners, and was granted to China as part of the negotiations heading into its ascension into the World Trade Organization (WTO) more than twenty years ago. This “normalcy” locked in tariffs for Chinese exports to the United States at a low baseline, removed those tariff rates from an annual congressional review, and created the environment in which Chinese imports saturated the American market. Resultingly, 3.7 million American jobs were lost to the yawning trade deficit with China between 2001 and 2018.
That is imbalanced trade that’s tangible. You can see it in erstwhile manufacturing communities in every U.S. state that have unstable economies and underemployed workforces. The corresponding rise in mortality rates and deaths of despair in them are not coincidental.
Revisiting PNTR is one of the recommendations I made to the House’s China committee when I testified at its inaugural hearing this winter. And I’m not the only one who has made this argument: A few weeks ago former U.S. Trade Representative Robert Lighthizer appeared before the committee and was asked bluntly if normalized trade relations with China should be revoked.
His answer was equally blunt: Yes. “In my opinion,” he said, “it would be one of the greatest things you could possibly do for American manufacturing.”
Manufacturing in the United States is rebounding, thanks in part to a raft of industrial policies enacted by the last Congress and signed into law by President Biden. But limiting the reach of Chinese imports into the U.S. market would certainly accelerate American manufacturing’s return and further reduce dangerous American dependencies on China for critical goods.
Congress must accept the reality that the United States faces an authoritarian economic power that is growing increasingly so, and which for decades has employed a form of state-controlled neo-mercantilism to imbalance bilateral trade, steal U.S. intellectual property, and destabilize the jobs of millions of American workers.
In the 34 years since China violently suppressed a pro-democracy movement in the streets of its own capital, the CCP, which controls the Chinese state, has consistently demonstrated that it doesn’t deserve the certainty of the same trade status we grant to allies like the Netherlands, Norway, and the United Kingdom. This is a government that showers its industries with subsidies, directs its military to conduct industrial espionage, has strengthened its state-owned enterprises, and employs forced labor. It’s well beyond time that we correct this decades-long mistake.
The United States should revoke China’s permanent normalized trade relations status.
