This week, the United States and China continued to take action on commitments made during the leaders’ meeting in October.
Late last year, China’s State Administration for Market Regulation (SAMR) released a draft implementation plan for the Regulations on Fair Competition Review (RFCR)—a regulatory overhaul reflecting a decade-long push to ensure that government policies are non-discriminatory and comply with fair competition principles.
Last month, preferential procurement of low-priced medical products under China’s volume-based procurement (VBP) system reignited public debate over the right balance between quality and affordability in the healthcare system. This procurement was prominent during the country’s 10th round of VBP for drugs and 5th round for high-value medical consumables in December.
China on Tuesday announced new tariffs and export controls in response to the United States imposing a 10 percent tariff, on top of existing tariffs, on all Chinese imports. Despite speculation that President Donald Trump and President Xi Jinping would speak by phone this week and potentially ease their respective tariff rulemakings, a call has not taken place and Trump indicated on Tuesday that he was “in no hurry” to do so.
On February 1, President Donald Trump followed through on his plan to impose an additional 10 percent tariff on all imports from China, effective Tuesday. He also imposed a 25 percent tariff on most imports from Canada and plans to impose tariffs on imports from Mexico at the same rate next month.
President Donald Trump’s Cabinet is aligned on a need for more tariffs, though the administration has yet to outline exactly when and how to do so, including determining which products and countries to target, as well as how high to set the duties. White House Press Secretary Karoline Leavitt indicated this week that Trump plans to levy tariffs on Mexico and Canada on February 1 and that he is still “considering” imposing a 10 percent tariff on all Chinese goods on the same day.
Since our last update, the United States and China have continued engaging in dialogue over IP protection to address business concerns, including the vice-ministerial meeting during the second Commercial Issue Working Group in Tianjin last September. Several critical issues impacting American rights holders—such as patent term extensions, regulatory data protection, and trade secret protection—were discussed during both high-level and technical exchanges.
President Donald Trump opted not to raise tariffs on China during the first week of his administration. Instead, he on Monday issued a regulatory freeze and directed executive department heads to review all new rules published under the Biden administration that have not taken effect, a move that could halt several rules with operational impacts for USCBC member companies. The White House also issued a trade policy memorandum later that evening directing federal agencies, primarily the Department of Commerce, Treasury, and the Office of the US Trade Representative, to conduct a top-to-bottom review of US trade policy.
China’s economy experienced a moderate rebound in the final quarter of 2024, providing the needed push for the country to meet its annual growth target of around 5 percent. According to data released by the National Bureau of Statistics, China’s real GDP in 2024 reached RMB 134.9 trillion ($18.42 trillion), marking 5 percent year-on-year growth.
Republican control of the Senate, which will last until at least 2026, means that the legislative agenda on China will be guided by new committee chairs who have the power to shift the policies of their Democratic predecessors. While some policies may only be recalibrated, others are likely to do a full pivot.
The Department of Commerce’s Bureau of Industry and Security on Wednesday issued the Framework for Artificial Intelligence Diffusion interim final rule, geared towards curbing China’s access to cutting-edge chips used in AI. The new rule imposes country-specific export caps on chips needed to train AI models, proposing a three-tier licensing system that determines the type and quantity of advanced chips a country can procure based on its relationship with the United States.
