The economic danger of revoking China’s permanent normal trade status

The Peterson Institute for International Economics (PIIE) holds a discussion of the new Policy Brief, “Economic implications of revoking China’s permanent normal trade status,” by Megan Hogan, Warwick J. McKibbin, and Marcus Noland.
The United States’ granting of permanent normal trade relations (PNTR) status to China in 2000 resulted in a large expansion of bilateral trade. Concerns over Chinese trade practices and the impact of Chinese exports on US import-competing sectors, together with other social and political developments, have fueled a political backlash and recent bipartisan interest in revoking China’s PNTR status. The authors find that revoking China’s status would cause higher US inflation and lower GDP than otherwise might exist. The US agriculture, durable manufacturing, and mining sectors would take the biggest hits to employment. The impacts would be magnified if China retaliates.
A Q&A session with the audience follows.
PRESENTERS
Warwick J. McKibbin
Nonresident Senior Fellow, PIIE; Australian National University
Marcus Noland
Executive Vice President and Director of Studies, PIIE
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