Us Trade Chief Says China Complying With Deal Commitments

Washington’s top trade official says China is honoring several obligations under existing trade agreements, while the United States continues to press Beijing on unfinished reforms and market barriers.

The US Trade Chief says China is complying with key deal commitments, signaling a cautious but notable shift in Washington’s tone on parts of the bilateral economic relationship. In a recent update on US–China trade ties, the Office of the US Trade Representative (USTR) said Beijing has implemented several obligations under existing agreements, even as major disputes over subsidies, technology, and state intervention remain unresolved.

The comments highlight a more nuanced picture of the world’s largest trading relationship: not a full reset, but recognition that some promises have been kept, alongside persistent areas of friction that continue to shape global trade and investment flows.

Background: The US–China trade deal landscape

The latest assessment comes against the backdrop of years of escalating trade tensions between Washington and Beijing.

• The US launched tariffs on hundreds of billions of dollars of Chinese goods starting in 2018, citing unfair trade practices and industrial subsidies.
• In January 2020, the two sides signed the so‑called Phase One trade agreement, which covered purchases, intellectual property, financial services, and currency practices.
• Despite the deal, US tariffs on roughly 360 billion US dollars of Chinese imports and Chinese tariffs on over 100 billion US dollars of US goods have largely remained in place.

Under Phase One, China pledged to increase purchases of US goods and services by about 200 billion US dollars above 2017 levels over 2020–2021, while also strengthening protection for intellectual property, reducing pressure on foreign technology transfers, and opening more space for US financial firms.

Subsequent US government and independent assessments found that while China made legal and regulatory changes in several areas, it fell well short of the headline purchase targets, especially during the COVID‑19 shock.

What the US Trade Chief said

In the most recent public assessment, the US Trade Chief framed China’s performance as mixed but stressed that Beijing is complying with a number of concrete obligations.

According to the USTR’s latest report on China’s implementation of trade commitments, US officials say:

• China has put into effect a series of laws and regulations aimed at strengthening intellectual property (IP) protections.
• Beijing has taken steps to ease some barriers in financial services, allowing greater foreign participation in securities, futures, fund management and insurance.
• Commitments on currency practices and forced technology transfers have been partially addressed through legal changes and formal policy statements.

US trade officials describe these developments as evidence that China is complying with specific, verifiable commitments in certain areas, even as they emphasize that implementation on the ground remains under continuous review.

At the same time, the Trade Chief underscored that structural concerns around industrial subsidies, state‑owned enterprises and non‑market policies continue to dominate the US agenda with China. Washington, the USTR stressed, is not rolling back core tariffs based solely on these partial improvements.

Areas where China is seen as complying

The latest US assessment points to several broad areas where China has moved closer to the letter of its trade obligations.

Intellectual property protection

US officials note that China has:

• Amended its patent, trademark and copyright laws to increase penalties for infringement.
• Expanded the scope of trade secret protection, including provisions against unauthorized disclosure by government officials.
• Created specialized IP courts and tribunals to handle complex disputes.

While US rights holders still report enforcement challenges, the legal framework on IP now more closely aligns with China’s commitments under both the Phase One agreement and World Trade Organization (WTO) rules.

Financial services and market access

The USTR highlights concrete openings in China’s financial sector that match earlier promises:

• Removal of foreign equity caps in securities, futures and mutual fund companies, allowing wholly foreign‑owned entities.
• Eased licensing rules for foreign banks and insurers.
• Streamlined approval processes for some cross‑border financial activities.

Several major US and European financial institutions have, in recent years, received approvals to take majority or full control of their China joint ventures, a development US officials cite as evidence of compliance with market‑access commitments.

Currency and macroeconomic practices

The Phase One agreement included language under which China pledged not to engage in competitive devaluation and to increase transparency in foreign‑exchange practices.

The US Treasury has, in recent reports, refrained from designating China a currency manipulator, while still closely monitoring Beijing’s interventions and reserves management. That stance reflects a view in Washington that, on narrow currency‑related obligations, China has broadly complied with the formal terms of past commitments.

Key commitments and current US assessment

Below is an overview of selected commitments and how US officials describe China’s performance:

Ongoing frictions and unmet obligations

Even as the US Trade Chief acknowledges areas of compliance, the broader message from Washington remains cautious.

US reports and statements continue to highlight several unresolved issues:

• Shortfalls on purchase commitments: Independent analysis found that China met only around 57 percent of its additional purchase targets for US goods and services under the 2020–2021 Phase One agreement. Energy and manufacturing purchases lagged especially far behind.
• Industrial policies and subsidies: The US argues that large‑scale state support for sectors such as steel, aluminum, solar panels, electric vehicles and batteries leads to global overcapacity and depressed prices, hurting foreign competitors.
• Role of state‑owned enterprises (SOEs): Washington and other trading partners say China has not meaningfully reduced preferential treatment for SOEs in credit, land and procurement, despite longstanding WTO obligations.
• Digital and data rules: US and European firms increasingly point to China’s data‑localization, cybersecurity and content‑control rules as barriers to fair competition, an area not fully covered by earlier trade deals.

The Trade Chief’s message, in essence, is that while China is complying with the letter of certain specific commitments, it has not yet addressed the deeper “non‑market” features of its economic system that the US views as the core problem.

Impact on businesses and global markets

For companies and investors, the nuanced US position has practical implications.

On one hand, confirmation that China is complying with selected commitments provides:

• Greater predictability for firms relying on new IP rules or market openings in finance.
• Some reassurance that abrupt escalations in tariffs or sanctions are less likely in the near term, barring a major political or security shock.
• A clearer legal framework for foreign businesses to defend their rights in Chinese courts and administrative processes.

On the other hand, the continuation of tariffs, export controls, and investment screening measures reflects the enduring strategic rivalry between the two countries:

• Many US and multinational firms still face elevated costs from tariffs on bilateral trade.
• Export controls on advanced semiconductors and related equipment limit the scope of cooperation in high‑tech sectors.
• Companies are diversifying supply chains toward third countries such as Vietnam, Mexico and India to reduce dependence on a single market.

Global markets therefore read the Trade Chief’s comments less as a signal of normalization and more as evidence of a managed but persistent competition, in which limited compliance on trade commitments coexists with broader economic de‑risking.

What comes next for US–China trade policy

The acknowledgement that China is complying with some deal commitments raises key questions about the future direction of US policy.

US officials have flagged several next steps:

• Enhanced enforcement: Washington intends to keep using existing tools—such as WTO dispute settlement, domestic trade laws, and bilateral talks—to address specific breaches or new barriers as they arise.
• Targeted cooperation: In areas where interests overlap, such as climate‑related technologies, agricultural standards or financial stability, both sides may pursue technical discussions even as strategic tensions persist elsewhere.
• Coalition‑building: The US is working with allies in Europe and Asia to push for reforms to WTO rules on subsidies, state‑owned enterprises and transparency, much of which is implicitly aimed at China’s economic model.
• Tariff and review timelines: Periodic reviews of existing tariffs and export controls give future US administrations opportunities either to maintain pressure, recalibrate measures, or bargain for further concessions.

For Beijing, the mixed US assessment—acknowledging compliance in some areas while spotlighting core structural concerns—signals that incremental reforms will not, on their own, end trade frictions. For Washington, recognizing limited compliance offers leverage and credibility, but does not remove domestic political pressure to get tough on China.

In that sense, the statement that China is complying with certain deal commitments marks an adjustment in tone, not a fundamental change in strategy. Businesses, investors and policymakers worldwide will continue to watch how this balance between enforcement, dialogue and rivalry evolves in the months and years ahead.