In a move that piles up further US leverage in advance of next week’s planned meeting between US President Donald Trump and Chinese President Xi Jinping, the US Trade Representative announced an investigation on Friday into Beijing’s compliance with the Phase One Trade Agreement.
The latest tit-for-tat salvo comes as the two economic giants amass threats that, if carried through, could cripple the global economy.
“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,” US Trade Representative Jamieson Greer said Friday in a statement.
USTR added that the agency plans to consider whether China has fully implemented its commitments under the 2020 agreement, what “burden or restriction” China’s actions imposed on US companies and “what action, if any, should be taken in response”.
The investigation comes as Trump and Xi plan to sit down next Thursday on the sidelines of the Asia-Pacific Economic Cooperation meeting in South Korea as the world watches to see who blinks first.
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Soybeans: China’s new bargaining chip in trade war with US?
Soybeans: China’s new bargaining chip in trade war with US?
In recent weeks, Beijing has announced plans to tighten the flow of strategic rare earth minerals and technologies essential in the production of hi-tech products from microwave ovens to jet fighters. It has also cut off purchases of US soybeans and sorghum, crippling American farmers who are an important part of Trump’s electoral base.
