Trump Eyes 7.5% Tariff on China Over Excess Capacity — SkimNews
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- Trump is moving toward a new 7.5% tariff on China for flooding the global market with underpriced goods, according to three people familiar with the internal deliberations.
- Administration officials selected 7.5% because they believe it would not endanger the one-year US-China trade truce or the planned late-September White House meeting between Trump and Xi Jinping.
- The tariff appears designed to work around a Supreme Court ruling earlier this year that struck down Trump's sweeping "reciprocal" tariff plan.
- The March Section 301 probe under the Trade Act of 1974 targets excess industrial capacity and forced-labor practices, and also covers 15 other economies including the EU, Singapore, South Korea, Vietnam, Taiwan, Japan, India, and Mexico.
- The new tariff would stack on top of 10%-12.5% tariffs announced last month on 60 economies accused of failing to enforce bans on goods produced with forced labor.
- China's trade surplus hit a record nearly $1.2 trillion last year as slowing domestic demand pushed manufacturers into overseas markets across autos, solar panels, cement, and steel.
- China's Ministry of Commerce denies seeking a large trade surplus, and the Chinese embassy in Washington called for bilateral resolution rather than unilateral tariff actions.
Why it matters: The 7.5% rate is a calibrated compromise: low enough to preserve the one-year trade truce and the Trump-Xi meeting, yet punitive enough to target Chinese overcapacity after the Supreme Court voided Trump's sweeping reciprocal tariffs. China already pushed back last month, making Beijing's response the first test of whether the truce holds.
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