context: PNTR (permanent normal trade relations) status is a legal designation the US granted the PRC in its domestic laws to confer WTO free trade treatment to Beijing following its accession to the multilateral trading system in 2001. Against rising tensions, there are now calls in the US to revoke this status, potentially leading to more tariffs and trade restrictions. Tu Xinquan 屠新泉 University of International Business and Economics WTO Research Institute director warns that this move could lead to significant diplomatic and economic breakdown, further raising trade unpredictability trade.
US policies are driven by internal political and economic considerations, says Tu Xinquan 屠新泉 University of International Business and Economics WTO Research Institute director, noting that the PRC's goal should not be about changing US policy but to protect its own economic interests, industries and firms. Tu issues policy recommendations, including
- 'doing our own thing well' and focus on domestic economic resilience
- strengthening the domestic circulation
- roll out policies to
- expand domestic demand, enhance economic vitality and increase household income
- stimulate consumption and strengthen the domestic market's role in economic growth
- roll out policies to
- supporting affected enterprises
- provide financial assistance and policy incentives to aid firms affected by US trade policies
- support their business transformation and market expansion
- enhance government-business communication to help firms adapt to new market conditions
- provide financial assistance and policy incentives to aid firms affected by US trade policies
- industrial and technological advancement
- promote industrial upgrade and innovation to increase value-added capabilities
- reduce reliance on foreign markets by accelerating advancements in key high-tech sectors
- e.g. semiconductors, AI and biopharmaceuticals
- strengthening the domestic circulation
- expanding international economic engagement
- diversifying trade partnerships
- reduce dependence on the US market by strengthening trade relations with other countries
- expand cooperation with BRI (Belt and Road Initiative) countries, ASEAN and the EU
- strengthen communication with the EU and resolve diffferences in trade and investment
- accelerate the implementation of the RCEP (Regional Comprehensive Economic Partnership)
- strengthen economic ties with emerging markets such as India, Brazil and Russia
- diversifying trade partnerships
- defending the multilateral trade system
- uphold the authority and effectiveness of the WTO amidst US unilateralism
- actively participate in WTO reforms to secure greater influence in global trade governance
- leverage multilateral platforms to drive global trade cooperation and agreements
- bilateral response to the US
- countermeasures
- firmly reject and respond to US restrictions while maintaining open communication channels for negotiation
- if the US unilaterally revokes the PRC's PNTR (permanent normal trade relations) status, Beijing should respond by adjusting its trade policies accordingly
- it could revoke the US' permanent trade relations status and implement yearly assessment, creating some space for future negotiations
- targeted trade countermeasures
- instead of a blanket retaliation, the PRC can implement precise countermeasures based on domestic industry needs
- impose high tariffs on products where the PRC has strong domestic supply while considering exemptions for others
- instead of a blanket retaliation, the PRC can implement precise countermeasures based on domestic industry needs
- maintaining cooperation in other sectors
- continue collaboration with the US in key areas such as anti-narcotics, healthcare, agriculture and counterterrorism
- establish mechanisms for information sharing and flexible negotiations to manage bilateral relations
- strengthening people-to-people and business exchanges
- countermeasures