The investigation comes as the U.S. government seeks greater leverage over China amid escalating trade tensions.
Published October 24, 2025
As trade tensions intensify between the world’s two largest economies, the United States has launched an investigation into whether China is not honoring a trade deal the two countries agreed to in 2020.
U.S. Trade Representative Jamison Greer announced the investigation Friday as President Donald Trump travels to Asia to meet with Chinese President Xi Jinping. China denies failing to abide by the agreement.
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“China has faithfully fulfilled its obligations under the Phase 1 Economic and Trade Agreement,” a spokesperson for the Chinese embassy in Washington said in a social media post.
The unfair trade practices investigation could give President Trump the power to impose additional tariffs on China, which has imposed huge trade tariffs during his second term.
“The administration appears to be looking for new sources of leverage to use against China, while at the same time trying to add new pressure points to get China to buy more U.S. soybeans and other goods,” Wendy Cutler, a former trade negotiator and current deputy director of the Asia Social Policy Institute, told The Associated Press.
The “Phase 1” agreement was concluded at the end of President Trump’s first term in 2020, when the United States imposed a series of tariffs on China in the name of bringing more “balance” to trade exchanges with China.
In the agreement, the Chinese government agreed to purchase more U.S. agricultural and manufactured goods.
The U.S. Trade Representative’s Federal Register notice (PDF) alleges that China has not fulfilled that commitment and other commitments related to intellectual property protection, forced technology transfer, and financial services.
For example, September was the first month since 2018 that China did not import soybeans from U.S. farmers.
“The opening of this investigation underscores the Trump Administration’s determination to hold China to its Phase 1 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 U.S.-China trade talks is scheduled to be held on Saturday, with discussions focused on China’s restrictions on exports of rare earth metals, which are essential to many U.S. high-tech products.
