The Office of the U.S. Trade Representative (USTR) has launched a Section 301 investigation into China's compliance with the Phase One agreement, a trade deal signed during President Donald Trump's first term. The probe focuses on China's failure to meet promised purchase levels-especially in U.S. agricultural goods, where Beijing committed to an additional $80 billion in imports over two years.

While agriculture was one of the few areas where China made significant purchases-reaching between 77% and 83% of its target, depending on metrics-China still fell short overall, importing less than it had in 2017 in other sectors. According to the Peterson Institute for International Economics, Beijing's increased buying was driven more by domestic needs-such as recovering from a swine flu outbreak-than political or trade obligations.

The probe, announced by U.S. Trade Representative Jamieson Greer, is part of a broader strategy to hold China accountable and signal the administration's readiness to reassert trade leverage. "This investigation underscores our resolve to protect American farmers, ranchers, workers, and innovators," Greer said in a statement.

The timing of the announcement aligns with new bilateral talks and an impending meeting between Trump and Chinese President Xi Jinping, with current tariff pauses set to expire next month. Tensions have escalated in recent weeks, with the U.S. expanding its trade blacklist and China tightening export controls on rare earths. Trump has also threatened 100% duties on some Chinese imports.

Agriculture Secretary Brooke Rollins and Treasury Secretary Scott Bessent have both recently pushed for stronger enforcement of the Phase One terms. At a recent Senate hearing, Bessent emphasized the need to "hold China accountable," while Rollins criticized the Biden administration for not following through on enforcement.

For the U.S. agriculture industry, the investigation revives concerns about export stability, especially in key markets like soybeans, pork, wheat, and sorghum. While China did increase purchases of certain commodities, many U.S. producers argue the deal never delivered the lasting market access it promised.

Jim Sutter, CEO of the U.S. Soybean Export Council, acknowledged the Phase One deal fell short and suggested it's time to "focus on negotiating a new agreement that benefits both U.S. farmers and Chinese end-users."

Former U.S. trade negotiator Wendy Cutler believes the probe is a calculated move to remind Beijing of Washington's ability to escalate tariffs again. "This could increase pressure on China to resume or increase purchases of U.S. soybeans and aircraft," she noted.

As public comments open and a hearing approaches in mid-December, U.S. farmers, co-ops, and agribusinesses will be watching closely. For those planning next season's yields, input purchases, and crop insurance strategies, this investigation could signal renewed volatility in agricultural trade, with implications for commodity prices, supply chains, and sustainable agriculture investments.