US launches investigation, attempting to cancel China's Most Favored Nation treatment? Expert: The US may hope to gain bargaining chips through this

On the 26th local time, the US International Trade Commission (USITC) announced that it will conduct an investigation to assess the impact of revoking China's Permanent Normal Trade Relations (PNTR) status on the US economy under a six-year scenario. The survey results are expected to be announced before August 21st. Reuters reported that this move may lead to the United States raising tariffs on Chinese imports.

The USITC stated that the investigation will focus on the trade, production, and price conditions of the US industries that may be directly and most affected by the increase in tariffs on Chinese goods to higher non most favored nation rates. The USITC will also study another scenario: if the US Congress revokes China's PNTR treatment, partial tariffs will be gradually implemented over five years on important products related to national security.

Reuters reported that if the United States revokes China's PNTR status, it will increase the basic most favored nation tax rate and add any punitive tariffs imposed by US President Trump. According to reports, when Trump took office in January last year, he instructed trade and commerce executives to evaluate legislative proposals to cancel permanent normal trade relations between China and the United States.

According to a report previously released by Chen Xing, an analyst at Caitong Securities, in 1979, China and the United States normalized their relations and signed the Trade Relations Agreement, which granted China the most favored nation treatment of the United States (formerly known as PNTR). However, this treatment still requires annual review by the US Congress. In 2000, the United States officially granted China PNTR status through the China Trade Relations Act. But since 2001, members of the US Congress have continuously proposed to cancel China's PNTR status. The relevant bills require a majority vote in both houses of Congress and are ultimately signed into law by the President. However, most of the bills submitted by US Congress members are put on hold after being submitted to committees in both houses.

According to the USITC, this investigation aims to assess the impact of the cancellation of China's PNTR on the US economy, industries, and sources of product imports. An independent analysis will be drawn at that time, and there will be no policy recommendations or other matters involved. However, at present, the United States is undergoing drastic changes in its foreign tariff policy, with Trump's intention to visit China and the upcoming sixth round of economic and trade consultations between China and the United States. The frequent release of contradictory information by the United States has attracted attention from the outside world.

Huo Jianguo, Vice President of the China World Trade Organization Research Association, told Global Times reporters on the 27th that many political attempts by the United States in history to cancel China's PNTR status were due to the failure to realize domestic economic interests. The investigation by USITC provides a policy basis and reference for the government, but it is not a legal procedure for cancellation. This investigation may not necessarily mean that the US authorities are truly considering revoking China's PNTR status, as the drastic changes in economic and trade relations between the two economies are not only detrimental to their respective economies, but will also have global impacts.

In the 2025 White Paper on China's Position on Several Issues Concerning China US Economic and Trade Relations, China pointed out that the PNTR status is the core foundation of China US economic and trade relations. Cancelling PNTR will bring the economic and trade relations between China and the United States back to the state of lack of certainty and predictability before China's accession to the World Trade Organization in 2001, and may even lead to the decoupling and disconnection of the Chinese and American economies.

Professor Bao Jianyun from the School of International Relations at Renmin University of China told Global Times reporters on the 27th that the investigation by USITC is not innovative, but reminded China that there are still some forces in the United States that have been committed to pushing for trade restriction measures to suppress China. As China and the United States are about to hold economic and trade consultations, it cannot be ruled out that the United States hopes to gain more bargaining chips through this.