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Like it or not, the United States and China are in a new Cold War. Given that reality, our leaders must take stock of our economic arsenal. It’s time for Congress to review China’s Permanent Normal Trade Relations (PNTR) status.
Countries granted PNTR status, once called “most favored nation,” receive preferential trade treatment such as lower tariffs and fewer barriers such as import quotas. Washington granted China PNTR status in the U.S.-China Relations Act of 2000.
That designation fundamentally altered China-U.S. trade relations. American consumers gained access to lower-priced Chinese exports, and U.S. companies enjoyed improved profit margins. From 2001 to 2021, the value of goods imported from China quadrupled, to $500 billion. U.S. exports to China also reached a record high in 2021, but so did our trade deficit with China.
But in the more than two decades since receiving PNTR status and its subsequent ascension to the World Trade Organization, China has routinely violated its trade commitments and international trade law.
In 2018, a U.S. government investigation found that China has been transferring technology illegally and stealing U.S. intellectual property at a wholesale level. The Office of the U.S. Trade Representative, tasked with monitoring China’s compliance with WTO commitments, found China to have a “poor” compliance record and is “violating, disregarding and evading WTO rules.
