The Trump administration plans to file a trade investigation into China’s failure to uphold the terms of a trade deal signed in President Trump’s first term, according to two people familiar with the investigation.
The move could result in more tariffs and risk increasing tensions between the United States and China. It would follow weeks of strained relations between the world’s two largest economies, and could be an effort by the United States to try to amass leverage before a meeting next week between Mr. Trump and Xi Jinping, China’s leader.
The investigation, which could be announced as soon as Friday, would be filed by the Office of the United States Trade Representative under Section 301 of the Trade Act of 1974. That section allows the administration to investigate whether the trade practices of other countries are harming the United States.
The inquiry could pave the way for more tariffs on Chinese imports, although no such decision has been made. Such investigations have historically taken months to complete. Data released in 2022 showed that China had fallen far short of commitments it made to buy American airplanes, soybeans, energy, services and other products.
A spokeswoman for the Office of the United States Trade Representative declined to comment.
The decision to initiate the case just days before high-level meetings between the United States and China underscored the economic stakes of a trade war that has consumed both countries and could be devastating for businesses on each side.
Since returning to the White House, Mr. Trump has added a 55 percent tariff on Chinese imports. Duties on some goods are much higher as a result of the tariffs the president imposed during his first term. The Chinese government has responded with tariffs on American products, including soybeans, resulting in a loss of business for U.S. farmers.
China has since raised the stakes, issuing an expansive system to control global trade in products that contain even small amounts of Chinese-produced rare earth minerals. Mr. Trump responded by threatening an additional 100 percent tariff on Chinese products starting Nov. 1, as well as export restrictions on American software.
Mr. Trump and Mr. Xi are scheduled to talk in person next Thursday on the sidelines of an international meeting in South Korea, where, analysts believe, the leaders could try to stabilize the relationship. On Wednesday, Treasury Secretary Scott Bessent and Jamieson Greer, the U.S. trade representative, flew to Malaysia to hold talks with China’s vice premier, He Lifeng. Those talks were expected to set the table for the meeting between Mr. Trump and Mr. Xi.
Mr. Greer said on CNBC on Wednesday that he and Mr. Bessent would meet with the Chinese “to try to see if there’s room to move forward on some of these really difficult issues that have come up due to some new Chinese measures on rare earths.” He called those measures “incredibly aggressive” and “totally disproportional” to any actions that the United States or its allies had taken against China.
The trade case could also provide the Trump administration with a way to keep pressure on Beijing in the coming months if the Supreme Court strikes down other tariffs the president has issued on China. The Supreme Court is set to hear arguments next month in a case against the tariffs that Mr. Trump imposed under a national emergency law, including many on Chinese imports. That court case would not affect any tariffs issued under Section 301.
It remains to be seen if the new trade case will prove to be a source of leverage against Beijing, or strain trade ties further. The Trump administration has repeatedly complained about China’s failure to comply with terms of a trade agreement signed in 2020, which followed months of negotiations and hefty tariffs imposed by the United States and China on each other’s products.
In the deal, Chinese officials committed to buying an additional $200 billion worth of American goods and services, including natural gas, soybeans and airplanes. They also agreed to open markets to American companies and provide greater protection for American technology and trade secrets, among other changes.
But after the deal was signed, the Covid-19 pandemic hit, and trade cratered. An analysis found that China had fallen far short of meeting its commitments. The Peterson Institute for International Economics calculated that, in the end, China had bought only 58 percent of the American exports it had committed to buy, not even enough to reach its import levels from before the trade war.
Michael Wessel, a former commissioner on the U.S.-China Economic & Security Review Commission, called China’s impact on American producers and workers “devastating.” He said that “promises made in the past have not been kept, and China needs to be held accountable.”
The Trump administration has blamed the Biden administration for failing to hold China to the terms of the agreement. But many analysts said the targets were unrealistic to begin with.
“China was never on pace to meet its purchase commitments,” wrote Chad Bown, a senior fellow at the Peterson Institute who did the analysis and later served an official under the Biden administration.
Some analysts have questioned how far more levies can get the Trump administration, with so many tariff threats already on the table.
Greta Paisch, a lawyer at Wiley Rein and a former U.S. trade official, said the U.S. trade case would “put the spotlight” on China’s recent pullback of purchases of soybeans and other agricultural products, which were a major part of the purchasing commitments in the first term.
But she pointed to a certain irony: The Chinese have said their falling soybean purchases were due to Mr. Trump’s tariffs, which prompted China to respond with levies of its own on U.S. soybeans and other products.
“Because the pullback on purchases was a result of tariff escalations in part, it isn’t clear that a threat of higher tariffs is going to resolve that issue,” Ms. Paisch said.
Ana Swanson covers trade and international economics for The Times and is based in Washington. She has been a journalist for more than a decade.
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