The New York Times is reporting today that the Trump administration is likely to begin a Section 301 investigation to evaluate China's compliance with its obligations under the 2020 Phase One trade deal.

In the report, the Times says that "[t]he Trump administration is preparing to file a trade investigation into China’s failure to uphold the terms of a trade deal signed in President Trump’s first term, according to two people familiar with the investigation, a move that could result in more tariffs and increased tensions between the United States and China." It notes that "[t]he investigation, which could be announced as soon as Friday, would be filed by the United States Trade Representative under Section 301 of the Trade Act of 1974, which allows the administration to investigate the trade practices of foreign countries."

Some additional explanatory details may still emerge, but if this investigation does go forward, it is perhaps an odd tactic for enforcing the Phase One deal. That deal has its own dispute resolution chapter, with an enforcement procedure that would allow the U.S. to take unilateral action if it believes China is not in compliance. Thus, a new Section 301 investigation does not seem necessary here. If the issue is one of domestic authority to impose tariffs, the deal arose from an earlier Section 301 investigation, and the determination there could provide the basis for any new tariffs.

In thinking about why the Trump administration is taking this approach, one possibility is that undertaking a new Section 301 investigation can generate new headlines or leverage. In the context of the broader U.S.-China trade conflict, perhaps the administration sees this as useful, especially ahead of next week's bilateral talks.

Another possibility is that Section 301 provides for a process to collect information from the public on these issues. The Phase One deal mechanism does not have anything comparable. As part of Trump's America First Trade Policy, there was a request for USTR to assess China’s compliance with the Phase One deal and recommend appropriate actions including tariffs and other measures, but that process did not involve gathering information from the public. A formal investigation under Section 301 would do this and generate additional evidence.

Finally, it may be that the Trump administration does not actually want to impose more tariffs at the moment. Trump seems to recognize at times that tariffs on Chinese imports can go too high, and tends to pull back. A Section 301 investigation allows the administration to give the appearance of taking action, but put off any actual tariffs for a while.