Reflecting on 25 Years of Changed US-China Relations

It’s been 25 years since President Bill Clinton was inaugurated, during which he signed a significant law in the rose garden, marking the beginning of Permanent Normal Trade Relations (PNTR) between the United States and China.

This legislation fundamentally altered the trade landscape between the two nations. By granting China the same trade terms enjoyed by US allies, it facilitated China’s entry into the World Trade Organization (WTO) and integrated its growing economy into the global trading system.

Back then, many experts predicted that the PNTR would be a wonderful opportunity for American workers and industries. For instance, Treasury Secretary Larry Summers, in May 2000, testified before Congress, stating, “There is only one answer to this question: It is right for the U.S. economy and for the world economy to welcome China into the global economic system.”

Gene Sperling, an economic advisor for both Obama and Biden, agreed with the notion that passing the PNTR would likely encourage positive changes in China. Similarly, Lael Brainard, formerly at the helm of the National Economic Council in Biden’s administration, supported the trade ties, noting that the U.S.-China WTO agreement would enhance fair trade and provide protections for domestic agriculture and manufacturing.

We can’t overlook President Clinton himself, who assured that this law would steer China in the right direction and advance the long-standing goals of the U.S. regarding China, benefiting American economic interests along the way.

However, hindsight suggests that those optimistic forecasts were catastrophically misguided. The widespread belief that granting PNTR would promote freedom in China’s economy failed dramatically. Instead, U.S. companies faced rampant intellectual property theft and restrictive regulations. Rather than evolving into a liberal democracy, China’s human rights record deteriorated, and the U.S. trade deficit expanded, plagued by unfair trade practices from China.

To illustrate, in 2001, the trade deficit with China stood at $84 billion. Fast forward to 2018, and that number surged to $418 billion. While back in 2000, China represented about 8% of global manufacturing output, it ballooned to nearly 30% by 2020. As one headline starkly noted, China has become “the world’s only manufacturing powerhouse.”

Reflecting on my own experiences from the early 2000s in Indiana, a state known for its manufacturing jobs, I remember how the introduction of cheap Chinese imports compelled many local businesses and factories to shut down.

According to an analysis by the Alliance for American Prosperity, China’s unjust trade practices have purportedly contributed to the loss of over 3.8 million American jobs since the enactment of the PNTR.

Those so-called experts who championed normal trade relations with China have continually let American workers down. Strangely enough, rather than acknowledging their miscalculations, they seem to reinforce their positions, which has unfortunately led to the economic situation the U.S. faces today with China.

Meanwhile, for workers in small towns, like where I grew up, the consequences of “free trade” with China were painfully clear. The promise of economic gains vanished as manufacturing jobs were outsourced, devastating entire communities and the livelihoods of countless families.

Ultimately, the idea of engaging in “free” trade with a nation actively undermining such principles was bound to fail. It only diminished domestic prosperity and increased reliance on a foreign competitor. Fortunately, the current administration seems committed to addressing these imbalances. President Trump’s America First trade policy represents a shift toward prioritizing American workers over foreign interests.