Washington has reopened scrutiny of China’s 2020 “Phase One” trade deal, launching a formal investigation that could reignite tariff tensions between the world’s two largest economies. The move sets the stage for a renewed test of U.S.–China economic diplomacy just days before Presidents Trump and Xi meet in Seoul.
Renewed Scrutiny of a Stalled Pact
The Office of the U.S. Trade Representative (USTR) has begun examining whether China fulfilled its obligations under the 2020 trade accord that eased tariffs during Donald Trump’s first term. The review, announced Friday in the Federal Register, will assess whether Beijing upheld commitments on intellectual property, forced technology transfer, agricultural purchases, and financial services.
The investigation revives provisions of Section 301 of the Trade Act, originally used to impose sweeping tariffs in 2018, and could pave the way for fresh import restrictions. The USTR noted that China fell short by more than $200 billion in U.S. import commitments based on available trade data. While the Biden administration kept some duties in place, the current administration has made clear that Beijing’s performance will now be reexamined in full.
Geopolitics Meets Economic Strategy
The inquiry comes amid rising trade tensions over rare earths, critical minerals, and high-tech supply chains. Earlier this month, Trump said the U.S. would impose 100% tariffs on Chinese imports starting Nov. 1, citing Beijing’s planned export curbs on rare earth elements. The upcoming meeting between Trump and Chinese President Xi Jinping during the Asia-Pacific Economic Cooperation summit in Seoul will test whether dialogue can temper another tariff spiral.
Analysts note that U.S.-China trade has already fragmented, with American companies diversifying production to Mexico, Vietnam, and India. Data from the Peterson Institute for International Economics shows China’s share of U.S. imports fell from 21% in 2017 to about 13% in 2024, a structural shift accelerated by tariffs and geopolitical risk.
Trade Leverage as a Long Game
The reopening of the Section 301 review shows how tariffs have evolved from short-term bargaining tools into instruments of structural leverage. As Washington weighs new measures, the question is less about enforcement than endurance: how long global supply chains, and trading partners from Mexico to Malaysia, can sustain an environment where economic policy and geopolitical rivalry are now inseparable forces shaping the rules of trade.
