Contemplated Duty on Chinese Goods

President Donald Trump is moving toward imposing a new tariff on China that would penalize the world’s second-largest economy for flooding global markets with underpriced goods, according to three people familiar with the matter cited by the Associated Press, The Globe and Mail, Fortune, India Today, The Hindu Business Line, WTOP, WDIV ClickOnDetroit and The Hindu — World. Two of those people, who spoke on condition of anonymity because internal discussions remain unfinished, said the administration is considering a rate of 7.5 percent.

Administration officials believe that level would not endanger the one-year trade truce between Washington and Beijing or a planned White House meeting between Trump and Chinese President Xi Jinping expected in late September. Bloomberg Tax News and The Straits Times reported the United States is set to impose the duty before the summit, restoring Trump’s second-term duties on China to around 20 percent—a threshold Beijing has previously described as consistent with the truce. Those duties would sit atop levies first imposed during Trump’s initial term and continued under the Biden administration.

One option under consideration, according to sources cited by The Straits Times, is announcing a higher headline rate while suspending part of it to leave an effective rate of 7.5 percent. Exact figures have not been finalized, and people familiar with the talks stressed that Trump could still alter course. Beijing and Washington are also discussing an extension of their trade pact, which established the truce set to expire on November 10. The Straits Times placed the summit date at September 24.

The White House and the Office of the U.S. Trade Representative did not respond to requests for comment on the deliberations, which Bloomberg News first reported. A White House official told The Straits Times that any tariff announcements would come directly from the administration and that discussion of them should be regarded as baseless speculation.

Legal Pathway After Supreme Court Ruling

The contemplated measure appears to be a calibrated effort to work around a U.S. Supreme Court decision earlier this year that struck down Trump’s sweeping reciprocal-tariff scheme under the International Emergency Economic Powers Act. Multiple outlets, including the Associated Press and The Straits Times, reported that the court declared those “Liberation Day” tariffs unlawful in February 2026.

In March the administration launched formal investigations under Section 301 of the Trade Act of 1974 into excess industrial capacity and forced-labor practices in China and more than a dozen other economies. Section 301 permits the president to levy tariffs against nations found to discriminate against U.S. companies or commerce. Economies named in the probes include the European Union, Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia, Thailand, South Korea, Vietnam, Taiwan, Bangladesh, Mexico, Japan and India.

Last month the administration announced tariffs of 10 to 12.5 percent on 60 economies accused of failing to enforce bans on goods produced with forced labor. In July it imposed a 12.5 percent tariff specifically on Chinese goods on the same grounds, according to The Straits Times. After temporary 10 percent tariffs imposed under Section 122 balance-of-payments authority expired in July 2026, they were replaced by the Section 301 forced-labor duties. East Asia Forum noted that both Section 122 and Section 301 measures face court challenges, with final decisions not expected before the end of 2027; Section 338 of the 1930 Smoot-Hawley Tariff Act remains a possible future legal basis.

U.S. Trade Representative Jamieson Greer told Bloomberg Television in July that the excess-capacity investigation would take longer than the forced-labor probe because of its complexity. A coalition of 25 states, including New York, California and Illinois, has filed suit at the U.S. Court of International Trade challenging the Section 301 levies, joining earlier actions by small businesses. The administration maintains that the duties are legally sound and supported by prior court rulings.

Broader Tariff Landscape Across Asia

East Asia Forum reported that Trump returned to the White House in January 2025 and that countries across the Asia-Pacific have since faced a varied array of tariffs. Before the second term the average U.S. applied tariff rate on world imports stood under 3 percent. The April 2025 “Liberation Day” tariffs produced a jagged profile: Chinese exports faced 28.8 percent, Cambodia 16.9 percent, Indonesia 12.1 percent and Myanmar 21.8 percent. Australia, Singapore and Taiwan were largely spared, with applied rates of 2.8 percent, 1.6 percent and 2.8 percent respectively.

Through the first half of 2026 the pattern largely held. Estimated applied tariff revenue as a share of total import value rose from 7.4 percent in 2025 to 7.5 percent in January–May 2026, according to U.S. International Trade Commission data cited by East Asia Forum. Tariffs on Cambodia climbed above 22 percent and on Myanmar above 26 percent, while exemptions lowered China’s average to 24 percent. New Zealand, the Philippines and Malaysia saw modest reductions to 7 percent, 6.2 percent and 4.9 percent.

The European Union accepted a U.S.–EU trade agreement in July 2025. The Philippines, South Korea, Japan and Taiwan acquiesced to tariffs while making investment pledges. Australia’s government under Prime Minister Anthony Albanese offered muted protest. East Asia Forum observed that only China has retaliated; other Asian countries negotiated unilaterally. Chinese exports to the world stand at an all-time high.

Trade Imbalances and Parallel Pressure

Surging exports pushed China’s trade surplus to a record of nearly $1.2 trillion last year, a figure carried by the Associated Press, The Globe and Mail and several other outlets. China’s Ministry of Commerce, in a report titled “China’s Position on the So-called Excess Capacity Issue,” stated that China has never sought a large trade surplus. In a May statement the ministry expressed hope that U.S. tariffs on China would not exceed levels outlined in Kuala Lumpur trade consultations.

Separately, the U.S. Treasury Department has warned that new secondary sanctions are being prepared against countries that continue business with Iran; China is Iran’s largest trading partner. Treasury Secretary Scott Bessent announced the warning without naming specific countries or providing extensive detail.

Perspectives

Chinese officials have rejected the premise of overcapacity and called for negotiated solutions. The Chinese embassy in Washington, in a statement reported by The Globe and Mail, said economic and trade issues should be resolved through bilateral talks rather than unilateral tariff actions and denied that China faces an overcapacity problem. Beijing has maintained that Washington agreed to cap any additional duties on Chinese exports at 20 percent.

U.S. administration sources, speaking anonymously to multiple outlets, frame the prospective 7.5 percent tariff as a measured response that preserves space for the truce and the September summit while addressing what they describe as market-distorting excess capacity. The White House has emphasized that official announcements alone should be treated as authoritative.