WASHINGTON – President Donald Trump is poised to introduce a new tariff aimed at China, targeting the nation for its practice of flooding the market with cheaply priced goods. This move, confirmed by three insiders knowledgeable about the situation, intends to address trade imbalances with the world’s second-largest economy.
Two of these sources, requesting anonymity due to the sensitive nature of the discussions, indicated that the proposed tariff might be set at 7.5%. This figure is believed to be strategic, aimed at not disrupting the existing one-year trade truce with Beijing or upsetting the anticipated White House summit between Trump and Chinese President Xi Jinping scheduled for late September.
Should this action be finalized, it suggests a carefully measured response from the White House, navigating around a Supreme Court decision earlier this year. That ruling had invalidated Trump’s earlier, more comprehensive high-tariff plan reminiscent of trade measures from the 1930s.
Following the decision, in March, the Trump administration launched formal investigations into China and other countries concerning issues such as surplus industrial capacity and coercive labor policies.
It remains uncertain whether the U.S. is close to reaching conclusions on these investigations into other markets, which include the European Union, Singapore, Switzerland, and several others. These countries were flagged for allegedly engaging in unfair trade practices.
The White House and the U.S. Trade Representative’s office did not respond to requests for comment on the tariff deliberations, which Bloomberg News reported earlier Monday.
The Chinese embassy in Washington said in a statement that economic and trade issues should be resolved through bilateral talks rather than unilateral tariff actions, and rejected the idea that it has an issue with overcapacity.
The excess industrial capacity probe of China was initiated under Section 301 of the Trade Act of 1974, which allows the president to levy tariffs against nations that discriminate against U.S. companies or commerce.
The new tariff would come on top of existing tariffs on China
The people familiar with the deliberations stressed that Trump could still change his mind on the new tariff on China.
It would come on top of tariffs of 10% to 12.5% announced last month for 60 economies around the globe that the Trump administration accused of failing to effectively enforce a ban on goods produced with forced labor.
Many countries, including China, protested that move, which took effect just as the clock ran out on temporary tariffs Trump had turned to after the Supreme Court in February struck down sweeping “reciprocal” tariffs he levied on nearly every U.S. trade partner.
China last month pushed back against claims of overcapacity, anticipating that the U.S. would soon release results of its probe and impose new tariffs.
Massive capacity in a slew of Chinese industries, from autos to solar panels, cement and steel manufacturing, has drawn increased attention from Beijing’s trading partners in recent years.
Although China’s own leaders have prioritized rebalancing the economy, slowing domestic demand has prompted companies to expand into overseas markets. Surging exports pushed China’s trade surplus to a record of nearly $1.2 trillion last year.
China has never sought a large trade surplus, the Ministry of Commerce said in a recently published report titled “China’s Position on the So-called Excess Capacity Issue.”
The deliberations come as the Treasury Department on Monday warned countries doing trade with Iran that new secondary sanctions are in the pipeline aimed at ostracizing nations that continue to do business with Tehran. China is Iran’s biggest trade partner.
Washington has promised the new sanctions would put even more pressure on an Iranian economy already battered by previous sanctions and a U.S. naval blockade as the U.S. and Israeli war against Iran nears the six-month mark.
Treasury Secretary Scott Bessent’s announcement Monday provided little detail and did not name which countries could face secondary sanctions.
___
AP writer Paul Wiseman contributed reporting.
Copyright 2026 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed without permission.