SkyBridge Capital founder Anthony Scaramucci says America's decision to grant China permanent normal trade relations and World Trade Organization membership was a costly strategic miscalculation.

After the U.S. signed a bilateral trade agreement with China in November 1999, Congress passed the United States–China Relations Act of 2000, granting Beijing permanent normal trade relations, and on Dec. 11, 2001, China formally joined the WTO.

According to Scaramucci's Sunday X post, China entered as an emerging market, protecting its own economy with tariffs while exporting to the U.S. with few restrictions. "We were too arrogant to question it," Scaramucci wrote on X.

Scaramucci argued that Beijing took U.S. technology, copied intellectual property, and pegged its currency to the dollar, a move that compounded every round of American deficit spending. He called that spending "the most regressive tax you can put on working people," arguing it simultaneously lowered China's export costs.

Scaramucci said China ran 10–11% growth for years, building a navy, a military and becoming a global superpower "largely on the back of deals we made with good intentions and almost no strategic foresight."

The trade imbalance Scaramucci described remains stark. The U.S. goods trade deficit with China stood at $202.1 billion in 2025, with exports of $106.3 billion against imports of $308.4 billion, according to the U.S. Trade Representative.

This dynamic shows no sign of reversing. U.S. export curbs on Nvidia (NVDA) chips are accelerating China's domestic semiconductor buildout, with analysts calling the restrictions "rocket fuel" for local chipmakers. The curbs have produced the opposite of their intended effect, accelerating Huawei's rise as a strategically essential AI supplier, with China's biggest tech firms now running dual-stack strategies alongside domestic alternatives.

The U.S. and China wrapped a high-stakes summit on Friday covering Taiwan, Iran, trade, artificial intelligence and fentanyl, with China committing to purchase at least $17 billion in U.S. agricultural goods annually through 2028, according to a White House fact sheet.