Key facts
- The U.S. is preparing to impose a 7.5% tariff on Chinese goods.
- The tariffs are a response to allegations of China's excess manufacturing capacity.
- The move is anticipated before a summit between U.S. President Donald Trump and Chinese President Xi Jinping.
- The tariff level being considered is 7.5%.
- This action is initiated under Section 301 of the Trade Act of 1974.
The U.S. is reportedly preparing to impose a 7.5% tariff on Chinese goods, a move aimed at penalizing Beijing for flooding the global market with underpriced products. This action, initiated under Section 301 of the Trade Act of 1974, is anticipated before a planned summit between U.S. President Donald Trump and Chinese President Xi Jinping.
Administration officials believe the proposed tariff level would not endanger the current trade truce or the upcoming meeting. The move appears to be a calibrated effort to circumvent a Supreme Court decision that previously struck down broad tariff schemes. The U.S. had previously launched investigations into China's excess industrial capacity and forced-labor regulations.
This potential tariff would add to existing duties on Chinese goods. China has contested claims of overcapacity, anticipating such U.S. actions. The country's massive industrial capacity in sectors like autos and solar panels has drawn international attention, with slowing domestic demand prompting companies to expand exports, leading to a record trade surplus last year.
Separately, the Treasury Department has warned countries trading with Iran about impending secondary sanctions, with China being Iran's largest trade partner.