US suspending trade ties with China over World Trade Organization deal ‘hard to imagine’

The recommendations in a report to Congress could see substantial increases in tariffs on Chinese imports
But one Chinese observer said the report was the work of ‘extreme anti-China elements’ and the move would have a serious impact on relations

US-China relations

Amber Wangin Beijing

Published: 10:30pm, 16 Nov 2022

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The US Congress is unlikely to act on recommendations urging it to suspend normal trade relations with China if Washington decides that Beijing has not complied with the agreement that allowed it to join the World Trade Organization, according to one Chinese analyst.

The recommendations are part of an annual report delivered by the US-China Economic and Security Review Commission on Tuesday, urging the US trade representative to assess China’s compliance.

Commission chairman Alex Wong said suspension could lead to a substantial increase in tariffs on imports from China.

The commission, an independent panel set up by Congress in October 2000, reports directly to lawmakers about the national security implications of the US-China trade and economic relationship.

Washington awarded China “Permanent Normal Trade Relations” (PNTR) status in 2000, as Beijing prepared to join the WTO.

Beijing has not officially responded to the report.

Lu Xiang, a China-US affairs analyst at the Chinese Academy of Social Sciences, said a suspension would be extremely serious and added that the commission was composed of “extreme anti-China” elements.

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“The PNTR status is a commitment made in the WTO agreement signed by both sides … The economic relationship between the two countries will be completely subverted if there’s a suspension, such a scenario is hard to imagine,” Lu said.

“[The report] is only advisory suggestions which have no legislative effect. What we care more about is bills by US congressmen – such as the Taiwan Policy Act, which has not been passed and is very dangerous.”

Washington does not officially recognise Taiwan as an independent state, but the Taiwan Policy Act would significantly enhance US diplomatic and military ties with the island and designate it as a “major non-Nato ally”.

Earlier this week, Joe Biden and Xi Jinping met face-to-face for the first time since the US president took office early last year. Among the concerns Biden raised during the meeting in Bali, Indonesia were China’s “non-market economic practices”.

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Lu noted that Biden was accompanied by Treasury Secretary Janet Yellen for the talks with Xi, highlighting the importance of trade and economics in future talks between the two sides.

The US report also made a series of recommendations about how to respond to any attack on Taiwan, including the creation of a permanent executive branch committee charged with implementing sanctions against China.

Xi has warned Biden that Taiwan is the key red line after months of tensions in the strait after US house speaker Nancy Pelosi’s visit to the island, which Beijing regarded as a serious breach of its sovereignty.

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Lu said Beijing would not consider US sanctions when weighing military action.

“If the central government decides to take back Taiwan by force, it will have nothing to do with US sanctions. We’re definitely taking the possibility into account, but reunification will not be stopped because of sanctions,” he said.