USTR Unveils Trump’s 2026 Trade
Agenda Focused on ‘Managed’ US-China Trade
US Trade Representative report touts deficit drop, pledges tougher Section 301 enforcement
ahead of Trump’s Beijing summit with Xi
1.
Shift Toward ‘Managed Trade’:
President Donald Trump’s 2026 Trade Policy Agenda emphasizes managing
bilateral trade with China for “reciprocity and balance,” signaling
a structured, leader-driven approach rather than unfettered free trade.
2.
Deficit Reduction Highlighted:
The report claims the US goods trade deficit with China fell 32%
year-over-year in 2025, and that China is no longer the largest source of
the US trade deficit.
3.
Six Core Trade Priorities:
o
Managing trade with China
o
Expanding reciprocal trade agreements while
retaining tariff leverage
o
Stronger enforcement of trade deals and US laws
o
Securing supply chains (minerals, semiconductors,
pharmaceuticals)
o
Review of the United States-Mexico-Canada
Agreement
o
Reforming global trade rules, including at the World
Trade Organization
4.
Section 301 Enforcement Continues:
The administration will maintain and expand actions under Section 301 of the
Trade Act of 1974, including:
o
Monitoring China’s compliance with prior
commitments
o
Addressing shipbuilding and semiconductor practices
o
Launching a mandatory four-year review of forced
technology transfer in May 2026
5.
WTO Criticism Reiterated:
The agenda criticizes the impact of China’s 2001 entry into the WTO, arguing
that decades of free trade led to US job losses.
6.
Busan Agreement Referenced:
The October 2025 Busan meeting between Trump and Xi Jinping is cited as
a foundation for rebalancing trade ties, with compliance monitoring planned.
7.
Upcoming Beijing Summit:
Trump is scheduled to visit Beijing (March 31–April 2) for high-level talks
with Xi, marking his first China visit since returning to office.
8.
Geopolitical Overlay:
Rising tensions following US-Israeli strikes on Iran add uncertainty ahead of
the summit, with China criticizing the killing of Ali Khamenei.
Overall
Significance:
The 2026 trade agenda reflects
a harder enforcement posture combined with structured negotiation—prioritizing
deficit reduction, tariff leverage, and strategic supply chain security, while
keeping diplomatic channels open ahead of the Trump-Xi summit.
US
President Donald Trump’s 2026 Trade Policy Agenda sharpens and, in some ways, reshapes
Washington’s approach to Beijing, blending enforcement with a new emphasis on “managed”
trade between the world’s two largest economies.
United
States Trade Representative (USTR) Jamieson Greer delivered the 2026 Trade Policy
Agenda and 2025 Annual Report to Congress on Monday (02.03.2026), highlighting a
significant shift in the US-China trade relationship.
Managing
trade with China for “reciprocity and balance” is one of six priorities in the administration’s
2026 trade agenda.
The
others include expanding the Agreement on Reciprocal Trade programme to extract
deeper market access while retaining tariff leverage; stepping up enforcement of
trade deals and US trade laws; securing supply chains in critical sectors such as
minerals, semiconductors and pharmaceuticals; launching a potentially contentious
review of the US-Mexico-Canada Agreement; and promoting American interests in international
forums, including efforts to reshape World Trade Organization rules.
“The
United States expects ongoing trade with China and will continue to engage to ensure
that trade is based on reciprocity and balance,” the document states. It adds that
by “managing bilateral trade with arrangements negotiated among each country’s political
leaders,” the relationship can be improved for “fairness, balance, and predictability”.
The
agenda also claims early results. It says the US goods trade deficit with China
fell 32 per cent year-over-year in 2025 and that, “for the first time since 2000,
China is no longer the trading partner with which the United States has its largest
trade deficit”.
“In
other words, in one short year, the United States has substantially diversified
its import sources and reduced its import dependency on China.”
Still,
the document leaves little doubt about its view of the past two decades. “There
is now no doubt about the costs of more than two decades of unfettered free trade
with China,” it says, arguing that the United States “lost millions of jobs” following
China’s accession to the World Trade Organization in 2001.
The
administration highlighted the Busan, Korea, deal between Trump and Chinese leader
Xi Jinping in October 2025, as the first step towards fairer trade and said it planned
to closely monitor China’s compliance with the agreement.
Enforcement
remains central. The US Trade Representative will continue Section 301 actions,
including monitoring China’s compliance with the phase one agreement and pursuing
responsive actions tied to China’s shipbuilding and semiconductor practices. In
May 2026, it will begin a statutorily required four-year review of forced technology
transfers.
Section
301 of the Trade Act of 1974 is used to address trade practices deemed unfair, giving
the USTR authority to impose tariffs or other retaliatory measures. Before Trump’s
“Liberation Day” tariffs last April, Section 301 was the primary tool the US used
in its trade tensions with China.
The
Chinese embassy in Washington did not immediately respond to a request for comment.
“President
Trump continues to flip the script on 40 years of non-reciprocal trade practices
and harmful globalist policies, eliminating long-standing barriers and strengthening
our workers’ competitiveness,” Greer said in a statement.
“American
farmers, ranchers, and producers are already reaping the benefits of President Trump’s
America First approach, with domestic production scaling up and new markets opening
for US exports abroad.”
The
trade policy comes ahead of Trump’s highly anticipated trip to China to meet with
Xi later this month, marking his first visit to the country since returning to office.
Trump is scheduled to visit Beijing between March 31 and April 2.
The
US-Israeli military strikes on Iran have added another layer of geopolitical uncertainty
ahead of the summit, with China condemning the killing of Iranian Supreme leader
Ayatollah Ali Khamenei.