U.S. Investigates China for Possible Non-Compliance with Phase one Trade Agreement

The Office of the United States Trade Representative (USTR) has announced the initiation of an investigation under Section 301 to assess whether China has fully complied with the commitments made in the Phase One Economic and Trade Agreement signed between the two countries. The process will examine potential restrictions on U.S. trade resulting from Chinese non-compliance and determine what measures could be taken in response.

As part of the process, the USTR invites the public to submit written comments and participate in a public hearing related to the investigation. Requests to speak and summaries of statements must be submitted by December 1, 2025, while the hearing will be held on December 16, 2025.

The origin of the conflict dates back to the agreement reached on December 13, 2019, after months of negotiations between Washington and Beijing. In it, China pledged to introduce structural reforms in intellectual property, technology transfer, agriculture, and financial services, in addition to increasing its purchases of U.S. goods and services.

However, five years after its entry into force, the United States maintains that China has not fulfilled its obligations, especially regarding non-tariff barriers, market access, and purchase volume.

The investigation is protected under Section 302(b) of the Trade Act of 1974, which allows proceedings to be initiated when a foreign country violates a trade agreement or denies benefits to the United States.