The U.S.–China Economic and Security Review Commission has called on lawmakers to end permanent normal trade relations (PNTR) with China.
MFN status grants to countries such as China the same trade benefits and privileges that key U.S. allies, such as the UK and Germany, have.
The report highlights how, under Xi Jinping’s leadership, China has transitioned from pursuing broad economic growth to a politically driven strategy that prioritizes “high-quality” production in emerging technologies. This approach is designed to establish dominance in high-tech sectors globally and is fueled by state-directed capital allocation, expanded manufacturing, and aggressive export practices—often at the expense of domestic industries in other countries. The committee argued in the report that these practices represent a clear threat to fair competition and necessitate decisive action to protect U.S. economic interests.
China leverages excess capacity and adjusted lending under its Belt and Road Initiative to sustain growth and expand its global economic influence despite systemic weaknesses. Its trade practices—such as enlarging surpluses with developing nations and redirecting exports to bypass tariffs—undermine global competition, jeopardize U.S. manufacturing and technology sectors, and strain domestic markets. In response, some emerging economies have begun to impose tariffs to shield their industries from these exploitative tactics.
Trump’s intention to appoint former U.S. Trade Representative Robert Lighthizer as his trade czar further signals a commitment to aggressive trade policies. Often called the architect of the U.S.–China trade war, Lighthizer is known for his hardline stance on China’s trade violations and his focus on protecting U.S. economic sovereignty. Revoking MFN would remove constraints, allowing Lighthizer to confront the CCP’s economic practices with full force.
The geopolitical climate has also shifted in favor of U.S. actions against China. The war in Ukraine has galvanized NATO, bringing Europe closer to the United States and making European allies more likely to align with U.S. policies under Trump. This is especially true given Trump’s dissatisfaction with U.S. funding of Europe’s defense. He has proposed expanding U.S. energy exports to help Europe reduce reliance on Russian imports. Simultaneously, Trump has expressed that countries benefiting from U.S. trade or defense resources must not undermine U.S. foreign policy—particularly when it comes to trade relations with China. This combination of public sentiment, economic adjustments, and geopolitical alignment provides a stronger foundation for pursuing a more aggressive trade stance with China.
If the United States revokes MFN status from China, Beijing will likely file complaints with the WTO to project itself as a rules-based actor and to apply diplomatic pressure on Washington. However, the WTO lacks enforcement mechanisms to compel the United States to reverse its actions. Even if a ruling favored China, the WTO’s authority would be limited to authorizing retaliatory tariffs or similar countermeasures—actions unlikely to significantly affect the United States, given current trade imbalances and geopolitical tensions.
A second Trump administration would likely amplify these dynamics. Trump has long criticized the WTO, accusing it of unfairly benefiting China and threatening to withdraw the United States from the organization. Under his leadership, the United States could invoke sovereignty to dismiss WTO rulings and focus on unilateral or bilateral trade policies. Trump might also use the national security exception, a broadly defined provision allowing countries to bypass WTO rules to protect their security, further complicating China’s ability to challenge U.S. actions. On some level, Trump may even view WTO opposition to his trade policies as an opportunity to justify withdrawing the United States from the organization entirely.
Given these stakes, the WTO is unlikely to escalate tensions with the United States, fearing the loss of one of its most influential members. The organization relies on voluntary compliance and international pressure to maintain its credibility, and a U.S. withdrawal would severely undermine its relevance. This would leave Trump free to impose trade restrictions on China, curbing funding for the CCP’s weapons programs and weakening the Chinese regime’s capacity to wage war against the United States or seize Taiwan.