China Rejects U.S. Accusations Over Phase One Trade Deal Investigation

Oct 25, 2025 at 11:41 AM

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Lanka Leader

China has strongly opposed the latest U.S. Trade Representative (USTR) investigation into its compliance with the Phase One trade deal, calling the move based on “false accusations” and urging Washington to correct its “wrong practices” to safeguard the outcomes of previous consultations.

In a statement emailed to the Global Times on Saturday, a spokesperson for the Chinese Embassy in Washington said Beijing “firmly opposes the U.S.’ false accusations and related review measures,” and called on the U.S. to “protect the hard-won results of China-U.S. economic and trade consultations.”

The comments came after the USTR on Friday (U.S. time) launched a new probe into what it described as China’s “apparent failure” to meet its commitments under the Phase One trade agreement signed in 2020 during former President Donald Trump’s administration. The deal had temporarily eased the U.S.-China trade war.

According to a USTR notice in the Federal Register, the investigation targets China’s alleged shortcomings in areas such as intellectual property protection, forced technology transfer, agriculture, and financial services—issues central to Trump’s earlier tariffs on Chinese imports.

Chinese Embassy spokesperson Liu Pengyu rejected the allegations, saying Beijing had “scrupulously fulfilled its obligations” by improving intellectual property protections, boosting imports, and expanding market access. “These efforts have created a favorable business environment that benefits investors from all countries, including U.S. companies,” Liu said.

Liu also accused Washington of undermining the spirit of the agreement through “systematic escalation of economic pressure,” including export controls, investment restrictions, and the spread of “false narratives” on sensitive issues such as Hong Kong, Taiwan, Xinjiang, and human rights. Such actions, Liu added, have “seriously damaged China-U.S. ties and disrupted normal trade and investment.”

China called on the U.S. to “adhere to the consensuses reached by the two heads of state,” and to handle differences “on the basis of mutual respect and equal consultation” to ensure stable and sustainable economic relations.

He Weiwen, a senior fellow at the Center for China and Globalization, told the Global Times that the U.S. investigation “lacks an international legal basis” and violates both WTO rules and U.S. commitments. He described the move as an attempt to gain leverage ahead of a new round of bilateral trade talks in Malaysia this weekend but warned that such pressure tactics “will not work.”

Earlier this year, China’s State Council Information Office released a white paper stating that it was the United States—not China—that had failed to honor commitments under the Phase One deal, particularly in areas such as technology transfer, agricultural trade, financial services, and exchange rate policy.

The USTR’s announcement coincides with renewed discussions on rare earth export controls between the two sides in Kuala Lumpur.

At a press conference on Friday, Chinese Commerce Minister Wang Wentao reiterated that China opposes “decoupling” and “supply chain disruption,” emphasizing Beijing’s commitment to maintaining the stability of global trade. “Based on mutual respect and equal negotiation, both sides can find ways to address each other’s concerns and promote healthy, stable, and sustainable development of China-U.S. economic and trade relations,” Wang said.