The United States has launched an investigation into whether China is out of compliance with a 2020 trade deal they struck together, as trade tensions ratchet up between the world’s two largest economies.
US Trade Representative Jamieson Greer announced the investigation on Friday, as President Donald Trump travels to Asia to meet with his Chinese counterpart, Xi Jinping. China denies that it has failed to abide by the deal.
“China has scrupulously fulfilled its obligations in the Phase One Economic and Trade Agreement,” a spokesperson for the Chinese embassy in Washington said in a social media post.
The probe into unfair trade practices could grant President Trump greater authority to impose more tariffs on China, which he has hit with massive trade duties during his second term in office.
“The administration seems to be looking for new sources of leverage to use against Beijing, while adding another pressure point to get China to buy more US soybeans as well as other goods,” Wendy Cutler, a former US trade negotiator who is now vice president at the Asia Society Policy Institute, told The Associated Press news agency.
The “Phase One” deal came at the end of Trump’s first term in office in 2020, when the US imposed a series of tariffs on China in the name of bringing greater “balance” to their commercial exchange.
In that agreement, Beijing agreed to buy more US agricultural and manufacturing goods.
A Federal Register notice (PDF) from the Office of the US Trade Representative alleges that China has not followed up on that promise or others related to intellectual property protections, forced technology transfers or financial services.
September, for instance, marked the first month since 2018 that China imported no soya beans from US farmers.
“The initiation of this investigation underscores the Trump Administration’s resolve to hold China to its Phase One Agreement commitments, protect American farmers, ranchers, workers, and innovators, and establish a more reciprocal trade relationship with China for the benefit of the American people,” Greer said in a statement.
A new round of US-China trade talks is set to take place on Saturday, and discussions will focus on China’s restrictions on the export of rare earth metals, essential for many US tech products.
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