The U.S. Trade Representative’s office has launched a compliance review of the Economic and Trade Agreement with China to assess if China is adhering to its obligations.
Key Takeaways
- The review aims to evaluate China’s adherence to commitments under the agreement with the U.S., tied to the “America first trade policy.”
- The review follows the recent USTR Report to Congress detailing China’s WTO compliance challenges.
- Findings could significantly impact future negotiations and U.S. trade policy decisions with China.
- President Trump’s Phase One agreement from January 2020 continues influencing current trade discussions.
The USTR Compliance Review
The White House has put into motion a compliance review of the Economic and Trade Agreement with China to ensure that Beijing is “acting in accordance with the commitments it made in the agreement.” Questions about adherence are not new, with the origins of this agreement tied to the foundational objectives of the “America first trade policy.” While the review was detailed at both the policy and executive levels, whether it specifically pertains to the Phase One deal signed in 2020 remains somewhat ambiguous.
In recent developments, USTR’s release of the 2024 Report to Congress on China’s WTO Compliance has drawn attention to the broader spectrum of trade issues. The report highlights how China’s non-market and anticompetitive practices continue to significantly challenge the global trading ecosystem. With the principles forged under the “America first trade policy,” reviewing compliance becomes crucial in maintaining fair competition and defending U.S. economic interests.
Impact on Trade Relations
The compliance review roots itself deeply in the U.S.’s approach to future negotiations and maintaining balanced trade practices. Scott Bessent, the Treasury secretary nominee, underscored the importance of the Phase One agreement as a starting point for discussions with China. Various stakeholders, including Jamieson Greer, a pivotal figure in the Phase One deal, have remained integral to these diplomatic engagements.
The broader starts of this review echo findings within the USTR’s report, which details the adverse impacts of China’s strategies on American industries. Ambassador Katherine Tai adds emphasis by noting the serious harm caused by China’s practices, shaping a cornerstone for enforcement and cooperation among international trading partners.
“This report details the breadth and scale of the constantly evolving non-market policies and practices that China deploys in pursuit of its anticompetitive objectives as well as the serious harm that those non-market policies and practices cause to workers, businesses, and industries in the United States and around the world. It is imperative that the members of the international trading community continue to work together to defend our shared interests against these many harmful policies and practices,” said Tai.
The Office of the United States Trade Representative announced today that it will review the Economic and Trade Agreement Between the Government of the United States of America and the Government of the People’s Republic of China (PRC) to determine whether the PRC is acting in…
— Craig Shapiro (@ces921) January 24, 2025
Strategic Implications
As the U.S. strengthens its trade posture, the Trump Administration has emphasized a strategy focused on renegotiating trade agreements, imposing tariffs, and prioritizing “America First” policies. The administration aimed to address China’s industrial targeting through tariffs, trade enforcement measures, and efforts to reduce the trade deficit.
As the review progresses under the auspices of the USTR Office, its findings will likely dictate how the United States navigates its economic relationship moving forward. With such complex dynamics at play, stakeholders on both sides of the Pacific continue to await greater clarity, while staying prepared to adapt to outcomes that fortify or reform existing agreements.
