U.S. Launches Investigation Into China’s Trade Deal Compliance Ahead of Summit

The United States is preparing to launch a formal investigation into China’s adherence to the trade agreement signed in 2020, raising tensions between the world’s two largest economies just days before a high-profile meeting between their leaders. The move could open the door to new tariffs on Chinese imports, although no final decisions have been made.

The investigation is expected to be announced soon and will be carried out under U.S. trade law that allows scrutiny of foreign trade practices. Historically, such inquiries take months to complete, but the timing suggests it may be used as leverage in upcoming negotiations.

Since the previous trade deal, relations between the U.S. and China have remained strained. Tariffs imposed on a broad range of Chinese products have been met with retaliatory duties on American goods, including key agricultural exports, significantly affecting U.S. farmers.

Recent tensions escalated after China introduced export controls on rare earth minerals, prompting the U.S. to threaten additional tariffs on a wide range of Chinese products and limit exports of American technology. Leaders from both nations are scheduled to meet at the end of October during an international summit in South Korea.

The 2020 trade agreement had set ambitious goals, including increased Chinese purchases of American goods and enhanced protections for U.S. technology and trade practices. Subsequent reviews indicated that China fell short of meeting these commitments, achieving only a fraction of the targets outlined in the deal.

The investigation reflects ongoing frustration in Washington over China’s trade practices and comes amid broader concerns about the uneven impact of trade disputes on both economies. Officials on both sides continue to emphasize the importance of dialogue, but the recent escalation highlights the fragility of progress made in prior negotiations.

As the U.S. considers potential measures, businesses and markets on both sides are watching closely. Any new tariffs could reverberate globally, affecting supply chains and trade flows well beyond the immediate dispute.