By Tanya Alvarez | J.O. Alvarez, Inc. Compliance Team
📧 compliance@joalvarez.com

The Office of the United States Trade Representative (USTR) announced today the initiation of a Section 301 investigation into China’s implementation of the “Economic and Trade Agreement Between the Government of the United States of America and the Government of the People’s Republic of China,” more commonly known as the Phase One Agreement.

Background

Signed on December 13, 2019, the Phase One Agreement was designed to address long-standing trade imbalances and structural issues between the two nations. Under the agreement, China committed to make significant structural reforms in areas such as intellectual property (IP) protection, technology transfer, agriculture, and financial services, while also agreeing to increase its purchases of U.S. goods and services.

Despite these commitments, USTR stated that “five years following entry into force, and despite repeated U.S. engagement with China to address implementation concerns, China appears not to have lived up to its commitments under the Phase One Agreement with respect to non-tariff barriers, market access issues, and purchases of U.S. goods and services.”

Scope of the Investigation

The new investigation will assess whether China has:

• Fully implemented its commitments under the Phase One Agreement;

• Imposed burdens or restrictions on U.S. commerce due to any non-implementation; and

• Whether any further action should be taken under Section 301 of the Trade Act of 1974.

Under Section 302(b) of the Trade Act, the U.S. Trade Representative is authorized to determine whether such conduct is actionable, including when U.S. trade rights are being denied or when a foreign act, policy, or practice is inconsistent with trade agreements.

Public Participation

USTR is inviting public comments and requests to testify in a hearing related to this investigation:

• Written comments and requests to appear must be submitted by December 1, 2025.

• A public hearing will be held on December 16, 2025.

• The comment docket will open shortly and can be accessed via the USTR public comment portal.

What This Means

This investigation reflects the U.S. government’s ongoing monitoring and enforcement of trade agreements and could potentially lead to new policy actions or trade measures depending on USTR’s findings. Businesses with exposure to China-U.S. supply chains, especially in agriculture, manufacturing, and technology, should stay alert for developments that may affect tariff structures or compliance requirements.

As always, our team at J.O. Alvarez, Inc. will continue monitoring both formal and informal updates from USTR and related government agencies.

For questions about how this investigation might affect your imports or exports, please contact us at compliance@joalvarez.com