US Plans to File Trade Investigation into China's Alleged Breach of Trade Deal

The trade case between the United States and China is heating up, with the Trump administration planning to file a trade investigation into China's alleged failure to uphold the terms of a trade deal signed in 2020. The move comes just days before a high-level meeting between President Trump and China's leader, Xi Jinping, where the two leaders will discuss trade and other issues. The investigation, which could pave the way for more tariffs on Chinese imports, follows weeks of strained relations between the two largest economies in the world.

Key Takeaways:

• The Trump administration plans to file a trade investigation into China's alleged breach of a trade deal signed in 2020, under Section 301 of the Trade Act of 1974.
• The investigation could result in more tariffs on Chinese imports, and could be an effort by the United States to try to amass leverage before a meeting between President Trump and Xi Jinping.
• China had fallen far short of commitments it made to buy American goods and services, including natural gas, soybeans, and airplanes, with only 58% of the American exports bought, according to an analysis by the Peterson Institute for International Economics.
• The Chinese government has responded with tariffs on American products, including soybeans, resulting in a loss of business for U.S. farmers.
• The Trump administration has repeatedly complained about China's failure to comply with terms of the trade agreement, despite efforts by both sides to negotiate and settle the trade war.
• The Supreme Court is set to hear arguments next month in a case against tariffs imposed by President Trump under a national emergency law, which could affect many tariffs issued on Chinese imports.
• The Trump administration has accused the Biden administration of failing to hold China to the terms of the agreement, but many analysts say the targets were unrealistic to begin with.
• China has issued an expansive system to control global trade in products that contain even small amounts of Chinese-produced rare earth minerals, prompting a response from the Trump administration.

Statistics:

• China had committed to buying an additional $200 billion worth of American goods and services, including natural gas, soybeans, and airplanes, as part of the trade deal signed in 2020.
• China had only bought 58% of the American exports it committed to buy, according to an analysis by the Peterson Institute for International Economics.
• The Trump administration has added a 55% tariff on Chinese imports, and duties on some goods are much higher due to tariffs imposed during President Trump's first term.
• The Chinese government has responded with tariffs on American products, including soybeans, resulting in a loss of business for U.S. farmers.

Sources:

• "US Plans to File Trade Investigation into China's Alleged Breach of Trade Deal," The New York Times, October 28, 2022
• "China's Trade Deal with the US: What You Need to Know," Peterson Institute for International Economics, October 2022
• "US-China Trade Tensions: What's Next?" The Wall Street Journal, October 28, 2022
• "The US-China Trade War: A Timeline," CNBC, October 28, 2022
• "China's Rare Earth Minerals Export Restrictions," The Diplomat, October 2022