Phase 1 The broken trade deal

Good morning/evening
 
I am sometimes amazed at the rabbit hole that Bitcoin and crypto has taken me down. It is not just learning about crypto, trading and charts, sometimes that includes paying attention to politics and macro events. Not long ago Tariffs were on everyone''s radar and I even researched and wrote about them, which is something I would never have thought about doing just a few years ago. As far as the tariffs and China go, I must admit I thought some of it was, well, just plain crazy. What I did not know was that back in 2020 there was a trade agreement already in place with China, and they broke that agreement which is probably why there is so much of a stance being taken now, with the new China trade deal.
 

 
This agreement was the Phase one economic and trade agreement, not to do with the recent negotiations, this is what the USA wanted to address back in Trump's last administration.
 
This agreement addressed certain acts, policies and practices of China
 
The U.S. has long accused China of letting trade secret theft slide. The phase 1 deal wanted to fix that. China agreed to-

• Let companies sue individuals (not just businesses) for stealing secrets. think cyberhackers or ex employees.
• Make hacking and breaches of confidentiality clearly illegal.
• Shift the burden of proof to the accused when there’s strong suspicion.
• Allow fast court orders to stop the spread of stolen info.
• Permit criminal investigations without proving losses first.
• Punish government officials who leak business secrets, fines, job loss, jail.

China made commitments to improve how it handled patents, especially for U.S. pharmaceutical companies. Key changes include:

• Letting companies resolve patent disputes early, before generic copies hit the shelves.
• Offering patent extensions if there are delays in approval processes.
• Allowing extra supporting data for drug patent applications.

 
 
China also tackled issues with trademarks and the confusing world of “geographical indications” (GIs) the idea that certain foods or goods must come from a specific place to use the name.
Highlights:

• Rejecting fake or bad-faith trademarks, like someone trying to register “Nike” in China to resell it.
• Ensuring that GI rules don’t block U.S. exports unfairly.
• Using practical definitions to decide if a term is “generic” (like “parmesan” or “mozzarella”).

China has long been ground zero for pirated and counterfeit goods. This agreement called for:

• Faster takedowns of fakes from online platforms.
• Real action against e-commerce sites that ignore piracy.
• Enforcing destruction of fake drugs and parts—from pills to car brakes.
• Ensuring government departments use legal software (yes, even Microsoft Office).

To make all this stick, China also agreed to:

• Raise fines and prison time for IP theft.
• Transfer serious IP cases to criminal courts.
• Speed up legal decisions and enforce judgments.
• Make it easier for foreign companies to sue, with streamlined court procedures and fairer trials.

 
Yes, China failed to fully meet its obligations under the Phase One trade agreement with the United States. Specifically, China did not purchase the additional $200 billion of US goods and services that it had pledged to buy over 2020 and 2021.  Here's a breakdown of how China fell short:

• Failure to meet purchase commitments: China's actual purchases of US goods and services were significantly below the target outlined in the agreement.  
• Shortfalls in key sectors: US manufacturing, agricultural, and energy exports to China all fell short of the pledged levels.  
• Pandemic impact: While the COVID-19 pandemic and subsequent economic downturn may have played a role, China's performance was never on track to meet the commitments from the outset.  
• US Perspective: Even the Biden administration and US trade officials acknowledged that China did not meet its obligations under the Phase One agreement.  

If you would like to read more about the earlier trade deal between China and the USA there is a link below.
 
As always thank you for reading and feel free to comment
 
 
https://ustr.gov/phase-one