U.S. plans to hold China accountable for trade deal failures

In recent discussions, U.S. Treasury Secretary Scott Bessent addressed the implications of China's non-compliance with the phase one trade deal, initially signed in January 2020 as an effort to ease trade tensions between the two nations. The Trump administration, which continues to influence tariff negotiations, plans to factor in China's failure to adhere to the agreed purchases and commitments. The original deal included China pledging to buy an additional $200 billion in U.S. goods over two years, a target that remains unachieved. Bessent stressed that President Trump considers economic security to be a matter of national security, noting the vulnerabilities that were laid bare during the COVID-19 pandemic in critical sectors such as medicine and technology. The situation is further complicated by changes in global economic dynamics, with both nations imposing significant tariffs on each other's goods—145% from the U.S. and 125% from China—that have had severe economic repercussions. Bessent highlighted that this high tariff regime is unsustainable and indicated that negotiations aiming to ease these tariffs would be crucial given the adverse impact they are having on the Chinese economy, which has shown signs of slowing down. Reports suggest that China's economy is facing substantial job losses, potentially losing between 5 to 10 million jobs, prompting a call for a rebalancing of economic strategies between the two nations. Bessent remains optimistic about negotiating a 'big deal' that would seek to address these imbalances by focusing on mutual economic interests in manufacturing. This leads to a potential future where both countries work together to address supply chain vulnerabilities and build a more equitable trade relationship.