The United States is all set to impose a 7.5% tariff on Chinese goods over allegations of excess manufacturing capacity ahead of a summit between Donald Trump and Xi Jinping next month. The imposition would restore Trump’s second-term duties on China to around 20%, a level Beijing has previously said is consistent with its trade truce with Washington.
The 7.5% tariff is besides the other levies imposed during Trump’s first term and extended during the Biden administration.
The move will revive Trump’s protectionist trade agenda after the Supreme Court struck down his previous import taxes on products from China and dozens of other economies.
Exact rates are yet to be finalized, said people in the know of things, while speaking on condition of anonymity.
As Trump is known to make last-minute demands or changes to trade announcements, one option under contemplation is announcing a higher duty rate for China and later suspending part of it in order to reduce the effective rate to 7.5%.
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Moreover, Beijing and Washington are also looking to extend their pact, which established a one-year truce that’s set to expire on Nov. 10.
In March, the Trump administration launched an investigation into more than a dozen major trading partners under Section 301 of the Trade Act of 1974 over excess capacity concerns.
Trump and Xi to meet in Washington on Sept. 24
Officials are hoping to publish the results of the excess capacity inquiry before the meeting between Trump and Xi in Washington on Sept. 24.
Trump is rebuilding a tariff wall that was struck down when the Supreme Court in February ruled his global levies, issued under the International Emergency Economic Powers Act, violated the US Constitution. The president’s temporary 10% global tariffs expired in July, and were also deemed illegal by a trade court.
In July, the Trump administration imposed a 12.5% tariff on Chinese goods, citing inadequate efforts to address forced labour practices. Beijing criticised the move but stopped short of announcing retaliatory measures.
Section 301 allows the US Trade Representative, under the direction of the president, to impose tariffs in response to other nations’ trade measures it deems discriminatory to American businesses or in violation of US rights under international trade agreements.
