Input Stories

Kicking off a busy week for trade policy, the Trump administration made several trade announcements this past weekend.

• On Friday, the United States Trade Representative opened a new Section 301 investigation into China’s implementation of the Phase One Agreement. More on that below.
• On Sunday, the administration announced a Malaysia trade agreement and critical minerals Memorandum of Understanding, a Vietnam joint statement, a Thailand joint statement and critical minerals MOU, and a Cambodia trade agreement.
• You can find the full breakdown by the NAM’s trade experts here.

Meanwhile, Treasury Secretary Scott Bessent and U.S. Trade Representative Jamieson Greer announced over the weekend that a U.S.–China deal is close at hand, ahead of President Trump’s planned meeting with Chinese leader Xi Jinping on Thursday. Here’s what to watch for:

Rare earths: Bessent suggested China will agree not to impose export controls on rare earths.

• As a reminder, China announced new restrictions on 12 of 17 rare earth elements, as well as equipment, technology and materials used in their mining and processing, along with licensing requirements for products made outside of China with trace Chinese REE content.

Soybean purchases: Bessent said China has agreed to “substantial agricultural purchases,” likely a reference to China’s near-zero purchases this year of American soybeans despite commitments under the Phase One deal.

Advanced chips: Though semiconductors were not mentioned by either Bessent or Greer, many experts expect China to require the U.S. to loosen restrictions on exports of advanced chips and chip-making equipment as part of a deal.

Tariff truce extension: Greer told reporters that negotiators had discussed an extension of the previous tariff truce, which had brought down tariffs from over 100% to current levels of 30% on Chinese exports and 10% on U.S. exports.

What’s next: Greer said the two sides were “moving to final details” of a deal “that the leaders can review and decide if they want to conclude.”

• President Trump also told reporters he will visit China early next year and that President Xi will visit the U.S. later that year.

But remember: USTR opened a new Section 301 investigation on China this past Friday, as noted above.

• The Federal Register Notice asked for comments on whether China has failed to comply with the Jan. 15, 2020, Economic and Trade Agreement between the U.S. and China (the Phase One deal) and potential actions to address U.S. denial of rights and benefits under the agreement.
• Comments are due Dec. 1, and USTR will also hold a public hearing.

The background: Following the original Section 301 investigation into China’s practices related to technology transfer and intellectual property theft, USTR first imposed an additional 25% duty on $34 billion (List 1) in July 2018 and applied the tariff to an additional $16 billion (List 2) that August.

• After retaliation by China, in September 2018, USTR imposed an additional 10% duty to $200 billion (List 3), increasing the rate to 25% in June 2019. In August, USTR imposed an additional 10% to a subset of a threatened $300 billion (Lists 4A and 4B). In light of the Phase One deal, List 4B was suspended indefinitely, and List 4A was reduced to 7.5%.

The specifics: USTR seeks comments on:

• Whether China’s non-implementation denies rights and benefits to the U.S.;
• Concrete examples of non-implementation;
• An estimate of the burden incurred from China’s non-implementation (meaning the level of trade potentially subject to additional duties, fees or restrictions on imports from China); and
• Recommended actions (new duties, fees, restrictions).

Weigh in: The NAM invites members to weigh in on whether a) their companies intend to submit comments and b) a general approach the NAM could take (if recommended) in commenting on China’s implementation of the Phase One deal.

• Please email NAM Vice President of International Policy Andrea Durkin with your responses.