The economic chess game between the United States and China moves into yet another phase as President Donald Trump weighs a new tariff strategy. This potential tariff aims to address concerns about China’s influence over global markets with its low-cost goods, sparking discussions on both sides of the Pacific.
Insiders, who requested anonymity due to the sensitivity of the ongoing discussions, revealed that Trump is contemplating a 7.5% tariff on Chinese imports. This figure, suggested by administration officials, is seen as a balanced approach that would not disrupt the existing trade truce with Beijing or derail the anticipated meeting between Trump and Chinese President Xi Jinping slated for late September.
This action comes in the wake of a Supreme Court decision earlier this year that thwarted Trump’s attempt at imposing broad tariffs reminiscent of those from the 1930s. In response, the administration initiated investigations in March, focusing on China’s industrial overcapacity and labor practices.
While the U.S. administration has yet to conclude its investigations into other countries over alleged unfair trade practices, including the European Union and several Asian nations, the White House and the U.S. Trade Representative’s office have not commented on the tariff considerations reported by Bloomberg News.
The Chinese embassy in Washington has remarked that trade and economic issues should be resolved through dialogue rather than unilateral tariffs, disputing claims of overcapacity.
The new tariff would come on top of existing tariffs on China
The possibility of Trump altering his tariff plans remains, according to those informed about the discussions. However, should they proceed, the new tariffs would be an addition to the 10% to 12.5% tariffs already imposed on numerous countries for failing to enforce bans on forced labor-produced goods.
China, alongside other nations, has contested these tariffs, which took effect as temporary tariffs lapsed following the Supreme Court’s dismissal of Trump’s previous “reciprocal” tariff strategy. China’s significant industrial capacity, spanning sectors from automobiles to steel, continues to draw global scrutiny.
Despite Chinese leadership focusing on economic rebalancing, slackening domestic demand has seen companies shift their focus to international markets, contributing to a record trade surplus nearing $1.2 trillion last year.
In related developments, the U.S. Treasury Department has issued a warning to countries trading with Iran, including China, regarding impending secondary sanctions aimed at isolating Tehran further amid ongoing conflicts. Treasury Secretary Scott Bessent’s statement on Monday lacked specific details on which nations might be affected.
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AP writer Paul Wiseman contributed reporting.
