China abandon an “excellent” trade deal with the U.S. after President Biden took office, according to Treasury Secretary Scott Bessent, revealing how leadership changes can upend international agreements.
At a Glance
- Treasury Secretary Scott Bessent revealed China ignored trade obligations negotiated during Trump’s administration once Biden took office
- The Phase One trade deal, signed January 15, 2020, required structural reforms to China’s economic and trade practices
- Recently, the U.S. and China agreed to temporarily roll back tariffs for a 90-day period
- U.S. will reduce tariffs on Chinese goods to 30%, while China will lower tariffs on American imports to 10%
- Both nations concluded they have a shared interest in preventing economic decoupling
China’s Strategic Retreat from Trump-Era Trade Agreement
Treasury Secretary Scott Bessent disclosed that China deliberately abandoned its trade commitments established during President Trump’s administration once President Biden assumed office. According to Bessent, an “excellent” trade agreement was in place by the end of Trump’s term, but Chinese officials chose to ignore their obligations after the leadership transition in Washington. The revelation provides a rare glimpse into how Beijing recalibrates its economic strategy based on its assessment of different U.S. administrations’ resolve and priorities.
The Phase One trade deal, signed on January 15, 2020, represented what President Trump described as “a historic step toward a future of fair and reciprocal trade.” The agreement required substantial structural reforms and changes to China’s economic and trade practices in areas including intellectual property protection, technology transfer, agriculture, financial services, and currency manipulation.
Despite initial optimism surrounding the deal, China’s subsequent actions suggest a calculated decision to test the boundaries of the new administration’s trade enforcement mechanisms.
— @amuse (@amuse) May 12, 2025
New Developments in U.S.-China Trade Relations
Recent developments indicate an attempt to reset trade relations between the world’s two largest economies. The Biden administration has reached a new agreement with China to roll back tariffs for an initial 90-day period. Under this temporary arrangement, the United States will reduce tariffs on Chinese goods to 30%, representing a significant decrease from previous levels while maintaining substantial protection for American industries. Concurrently, China has committed to lowering tariffs on American imports to 10%.
Bessent’s discussions with Chinese officials revealed that both nations recognize their economic interdependence despite ongoing geopolitical tensions. Both sides concluded they have a shared interest in preventing complete economic decoupling, which could destabilize global markets and supply chains. The acknowledgment of this reality underscores the complex balance between competition and cooperation that defines the U.S.-China relationship in the current international order.
NEW: Treasury Secretary Scott Bessent reveals China told him that they “ignored their obligations” to the U.S. under the Biden administration because they “chose not to enforce it.”
“In January 2020, President Trump produced a template. We had an excellent trade agreement with… pic.twitter.com/BSsv5Nnb0g
— RedWave Press (@RedWave_Press) May 12, 2025
Strategic Implications for American Trade Policy
The revelation that China altered its compliance based on U.S. leadership changes carries significant implications for American trade strategy. It suggests that Beijing conducts continuous assessments of American administrations, adjusting its level of compliance with international agreements based on perceived strength or weakness. This dynamic highlights the importance of maintaining consistent trade enforcement mechanisms across different administrations to secure Chinese compliance with negotiated terms.
The new temporary tariff arrangement represents an opportunity to establish more predictable trade relations, but questions remain about long-term enforcement. Historical patterns indicate that China’s adherence to trade obligations fluctuates based on its assessment of U.S. resolve. American negotiators face the challenge of creating sufficient incentives for compliance while developing robust verification measures that can withstand changes in domestic political leadership.
As both nations proceed with implementing the new tariff reductions, American businesses must carefully evaluate the reliability of Chinese commitments in light of past behavior. The complex interplay between economic interests and geopolitical competition continues to define the relationship between these economic powerhouses, with significant implications for global trade patterns and supply chain configurations in the coming years.
