WASHINGTON—November 9, 2023—The US-China Business Council (USCBC), a private, nonpartisan, nonprofit organization of more than 270 American companies that do business in China, today released new research it commissioned from Oxford Economics that shows how revoking Permanent Normal Trade Relations (PNTR) status for China would significantly harm the US economy, consumers, and businesses by driving up prices, eliminating hundreds of thousands of jobs, and making it harder for American companies to compete globally.
“Those calling for the end of PNTR ignore significant and lasting costs to the US economy and American businesses, workers, and consumers, and harm virtually every sector and every corner of the country,” USCBC President Craig Allen said. “USCBC believes that policies impacting the US-China commercial relationship should be targeted to achieve specific national security objectives and coordinated with US allies and partners. Revoking PNTR would accomplish neither.”
Additionally, the subsequent tariff increases and likely Chinese retaliation, on top of existing Section 301 tariffs, would be particularly painful to US manufacturers, agriculture producers, and consumers, who would face higher prices on consumer products. Estimated costs over the five-year period outlined in the report include:
- A peak loss of over 800,000 American jobs in the first year, with 300,000 jobs still unrecovered at the end of the five years.
- An average cost per US household of $11,100.
- A cumulative loss of nearly $2 trillion in US GDP, which would be felt in every US state.
- US exports would fall 2.4% below baseline estimates in year one and then 4.1% in year five as a result of US manufacturers and producers facing higher prices and reduced international competitiveness.
- A reduction of US agriculture exports to China of more than 30%, a significant loss for US farmers and ranchers. China is the largest market for US exports of soybeans ($16.4 billion), corn ($4.8 billion), coarse grains such as sorghum ($2.2 billion), and pork ($1.1 billion).
“We estimate that revoking PNTR would cost the US more than $760 billion in lost business investment over five years, and US agricultural exports to China would fall more than 30% as a result of expected Chinese retaliation,” Oxford Economics head of US macro consulting and the report’s lead economist David Schockenhoff said. “The US states suffering the most severe economic impacts would be in the South and Midwest. California and Texas see the largest declines in GDP and employment in absolute terms and are more adversely impacted than the nation as a whole.”
The Oxford Economics report follows a recently released PNTR study by the National Retail Federation, which shows similar and specific harms to US consumers and retailers by sector, finding a $31 billion loss in overall consumer spending power resulting from increased tariffs on just five consumer product categories.
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