U.S. Launches Section 301 Investigation into China’s Phase One Trade Agreement Compliance

On October 24, 2025, U.S. Trade Representative Jamieson Greer announced the launch of a Section 301 investigation into China’s implementation of its commitments under the phase one trade agreement, which was singed on January 15, 2020, in response to the U.S. imposing up to 25% in Section 301 duties.

As a reminder, the phase one trade agreement consists of eight chapters covering intellectual property, technology transfers, financial services, exchange rate practices, and trade in agriculture, energy, and manufactured goods, as well as trade in services. As part of the agreement, China pledged to increase its U.S. imports by $200 billion over the next two years.  China also committed to liberalizing its financial sector, strengthening intellectual property protection, and opening its markets without technology transfer requirements that are not based on market principles. More information about the agreement can be found here.

According to the federal register notice, the investigation will assess whether China’s actions or inactions have placed a burden on U.S. commerce and what actions the U.S. should take in response.  

The Office of the U.S. Trade Representative is also soliciting detailed public input, including specific examples of China’s non-compliance, as well as estimates of the resulting burdens on U.S. commerce. Stakeholders are also encouraged to weigh in on possible responses, such as the scope and level of tariffs on Chinese imports, restrictions on Chinese services, and limitations on imports of Chinese goods.

The public comment period will open on October 31, 2025, at https://comments.ustr.gov/s/, with submissions—along with requests to participate in the December 16, 2025, public hearing—due by 11:59 p.m. EST on December 1, 2025.

CBP Unveils ACE Upgrades for Section 232 and IEEPA Import Reporting

On October 23, 2025, CBP announced that a new ACE Entry Summary record will be added for reporting the value content of aluminum, steel, and copper imports, or the non-U.S. content for imports subject to duties under the International Emergency Economic Powers Act (IEEPA).

CBP also announced that it is working on additional ACE updates, including new functionality to support the long-term implementation of the “automobile part import duty offset.” This update, under development since September, will allow ACE to collect and decrement the approved “import adjustment offset amount” from granted licenses. For further information, CBP has referenced Proclamation 10925 and related procedural guidance published in the June Federal Register.

Finally, CBP postponed the target date for deploying a functionality to trace crude oil imports using global interoperability standards, shifting the date from November 8, 2025 to “TBD.” This oil-tracing project began as a pilot in October 2024.

Trump Ends Trade Talks with Canada

On October 23, 2025, President Trump announced on social media that he was ending all trade negotiations with Canada, citing a television advertisement from the Ontario government as the catalyst. The ad, which features former President Ronald Reagan voicing opposition to tariffs, prompted Trump’s decision. The President accused Canada of “fraudulently using a FAKE advertisement featuring Ronald Reagan speaking negatively about tariffs.” Trump further claimed that the ad was an attempt to influence the Supreme Court and other judicial bodies currently reviewing the legality of his administration’s sweeping tariff policies.

In response, Ontario Premier Doug Ford announced that he would halt the anti-tariff ad campaign that had disrupted Canada’s trade discussions with the U.S. However, the press reported that the White House remains skeptical about resuming negotiations.

USTR Proposes Trade Actions Against Nicaragua Following Section 301 Investigation

On October 21, 2025, the Office of the United States Trade Representative (USTR) announced a package of proposed trade actions targeting Nicaragua. This announcement comes after the conclusion of an investigation conducted under Section 301 of the Trade Act of 1974 (Section 301), which was launched in December 2024. Section 301 empowers the President to take appropriate action against foreign countries that engage in unfair trade practices, following an investigation by USTR.

The Section 301 investigation found that the Nicaraguan government has implemented a series of unreasonable trade policies and practices that pose significant obstacles to U.S. commercial interests. Among the most serious findings, Nicaraguan authorities have confiscated property belonging to both domestic and foreign religious organizations, as well as assets owned by U.S. businesses. These actions have fostered a high-risk investment environment, discouraging American companies from operating in Nicaragua and undermining the confidence of international investors.

In addition to these commercial concerns, USTR’s investigation uncovered credible evidence of severe labor abuses and widespread human rights violations. These include the exploitation of Nicaraguan workers and systemic repression of civil society groups. As a result, these labor and human rights issues have been referred to the U.S. Department of State for further investigation, with the possibility of additional legal measures to address these violations

In light of these findings, the USTR has recommended the following measures:

• Suspension of CAFTA-DR Benefits: Suspend all or select benefits provided to Nicaragua under the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR), including tariff concessions and the accumulation of Nicaraguan content for other CAFTA-DR partners. This could take effect immediately or be phased in over a period of up to 12 months.
• Increased Tariffs: Impose tariffs of up to 100% on all imports from Nicaragua, either immediately or on a phased schedule over 12 months.
• Targeted Tariffs: Impose up to 100% tariffs on specific Nicaraguan imports immediately, with the possibility of extending these tariffs to additional sectors over a 12-month period.

USTR is currently seeking public comments on whether increasing tariffs or withdrawing trade concessions in certain sectors would effectively address the economic harm suffered by U.S. businesses, including small and medium-sized enterprises. Stakeholders are encouraged to submit written comments by November 19, 2025.

The Husch Blackwell team continues to monitor developments and will provide additional updates as they arise.