China strongly rejects USTR probe into Phase One trade deal compliance

Washington DC [US], October 25 (ANI): China on Saturday strongly opposed a US Trade Representative (USTR) probe into its compliance with the Phase One trade agreement, accusing Washington of escalating economic pressures and spreading false narratives that undermine bilateral ties.

"China firmly opposes the US's false accusations and related review measures," said Liu Pengyu, a spokesperson of the Chinese Embassy in the US, in a post on X.

The embassy's sharp rebuke came hours after USTR announced the initiation of a Section 301 investigation to scrutinise whether Beijing has fully honoured its commitments under the Economic and Trade Agreement signed during US President Donald Trump's first term.

"China as a major country that takes its responsibilities seriously, China has scrupulously fulfilled its obligations in the Phase One Economic and Trade Agreement by protecting intellectual property, increasing imports, and providing greater market access, which has created a favorable business environment geared to investors of all countries, including US companies, for them to share the benefits of China's economic development," the spokesperson asserted.

According to the Office of the USTR, the Phase One deal, effective since 2020, required China to undertake structural reforms in areas like intellectual property, technology transfer, agriculture, and financial services, while committing to boost purchases of US goods and services to address the trade deficit.

USTR Jamieson Greer, in announcing the probe, highlighted concerns over non-tariff barriers, market access, and purchase shortfalls despite repeated US engagements.

"President Trump made history in his first term when he stood up for the American worker and brokered the Phase One Agreement, establishing a more fair and reciprocal trade relationship with China," Greer said.

"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," he added.

The investigation, authorised under Section 301 of the Trade Act of 1974, will assess any burdens on US commerce from alleged non-implementation and potential responses, including tariffs or other remedies.

USTR has invited public comments, with submissions due by December 1, 2025, and a hearing scheduled for December 16, 2025.

In its response, China countered that the US has "systematically escalated economic and other forms of pressure against China" since the deal's signing, citing export controls, investment restrictions, and "false narratives" on human rights, Hong Kong, Taiwan, Xinjiang, and the COVID-19 pandemic.

"These actions have done serious damage to China-US ties as well as economic and trade relations and disrupted normal trade and investment activities and significantly undermined the conditions necessary for the implementation of the Agreement," the spokesperson said.

Beijing urged Washington to "promptly correct its wrong practices" and adhere to the recent phone conversations between Presidents Xi Jinping and Trump. It called for using the bilateral consultation mechanism to address concerns through "dialogues and based on mutual respect and equal-footed consultation", aiming for "stable, sound and sustainable development of the China-U.S. economic and trade relationship".

The move by the US comes moments before top economic officials from both nations are set to talk in Kuala Lumpur to prevent an escalation of their trade war.

The discussions aim to ensure that a meeting occurs next week between US President Donald Trump and Chinese President Xi Jinping.

"These talks on the sidelines of the Association of Southeast Asian Nations summit will chart a path forward after Trump threatened new 100% tariffs on Chinese goods," The Sun reported. (ANI)

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