If the United States revokes its previous status as the most favored nation ( MFN), permanent normal trade relations ( PNTR ), China is expected to experience a 3.4 % deflationary pressure.  ,
Since Donald Trump’s win in the Republican presidential election on November 5 and his pledge to raise taxes on all imported Chinese goods to 60 %, Beijing’s worries about losing its Nafta status have grown.  ,
The Restoring Trade Fairness Act, which calls for the end of China’s PNTR, was introduced on November 14th, adding to the already-graved controversy.
According to Moolenaar, the US Congress voted to grant China PNTR status in 2000 in the hopes that it would deregulate and follow good trading techniques, but” this gamble failed.”
” Our country has been deposed by our country, our manufacturing base has eroded, and our most important adversary has lost work,” says PNTR. He claimed that the CCP has also abused our markets and violated the hopes for liberty and fair rivals that were present when the totalitarian regime was granted the PNTR more than 20 years ago.
The Neither Permanent nor Standard Trade Relations Act was introduced by Democratic Senators Marco Rubio, Tom Cotton, and Josh Hawley on September 26. Trump announced Rubio as the next US secretary of state on November 13. Rubio is likely to get Senate verification and started his phrase after Trump’s January 20, 2025, opening.
One of the most disastrous selections our nation has ever made was to provide Communist China the same business benefits that we do to our greatest allies,” Rubio said in a media release from September. ” Our government’s trade deficit with China more than quadrupled, and we exported millions of American jobs. Ending ordinary trade relations with China is a no-brainer”.
Three scenarios ,
In October, Shenwan Hongyuan Securities, a state-owned brokerage company, commissioned Infinite-Sum Modeling, a Shenzhen-based discussing company, to do research on conceivable US tax hikes against Chinese products.
” If the US revokes China’s MFN status, it will impose an average of more than 60 % tariffs on Chinese goods”, calculating from the facts that the US imposes” an average 42 % tariff for non MFNs, and there is an additional 20 % Section 301 tariff against Chinese products”, Zhao Wei, chief economist of Shenwan Hongyaun, writes in a research report.
He claims that 48 % of US imports of Chinese goods have stopped being subject to the low MFN tariff after a trade war started in 2018. He quotes a report from the Peterson Institute for International Economics, which states that the average tariff on Chinese goods was 19.3 % in June 2023, up from about 2.3 % in 2018.  ,
If a new business war breaks out between China and the US, Shenwan Hongyuan created financial projections for three cases:
- 1. The US imposes a 60 % tax on Chinese goods,
- 2. The US imposes a 60 % tariff on Chinese goods, and a 10 % tariff on all other imported goods,
- 3. The US imposes a 60 % tariff on Chinese goods, and a 10 % tariff on all other imported goods, while China retaliates with a 60 % tariff against American goods.
The US would be able to reduce its trade deficit under all three cases, but it would also experience from slower home use and economic expansion.  ,
Zhao explains that the US would prefer scenario 2 or 3, where its GDP may decline significantly over that of China.  ,
In an article published on November 15, a Jiangsu-based critic who uses the pseudonym” Beibei” claims that if China’s Import position is voided by the US, Sino-US business relations and global supply chains will suffer significantly.  ,
” If this actually happens, tax barriers will substantially increase, resulting in a plummeting of the deal between China and the US, Beibei says”. Orders will shrink and costs will rise for several Chinese exporters. Some small-and-medium-sized businesses may also face risks of debt.”
The journalist claims that by concentrating more on local businesses and some Belt and Road nations, China will be able to overcome these obstacles. She claims that Chinese companies could also benefit from this opportunity to move from labor-intensive to knowledge-based industries and increase the value of their goods.  ,
She adds that rising costs and potential supply chain disruptions may harm US businesses. She claims that prices will rise for US suppliers and customers who rely on high-quality, low-cost Chinese products.
Since Trump won the election, the Chinese foreign government has so far refused to comment on potential US tax excursions and called the subject” speculative. ”  ,
Foreign envoy to the US, Xie Feng, stated in a Hong Kong conference on November 15 that cooperation between China and the US has never been a zero-sum sport.  ,
He claimed that 70 000 US businesses can generate US$$ 50 billion in China with the bilateral trade of more than US$ 660 billion annually. He added that Chinese goods may lower American customers ‘ costs of living.
The Asia Times has Yong Jian as a source. He is a Chinese blogger who specializes in Chinese technologies, economy and politics.  ,