1 week ago
Trump Weighs 7.5% Tariff on China Over Excess Capacity
The United States is thinking about adding another tax on goods from China.
The possible tax would be 7.5%.
US officials say China is making more products than its own people can buy and selling them cheaply around the world.
They are especially concerned about industries such as cars, solar panels, cement and steel.
The new tariff would be added to tariffs already placed on Chinese goods.
Officials hope the idea would not damage a temporary trade agreement between the two countries.
They also hope it would not interfere with a planned meeting between Donald Trump and Xi Jinping.
China says the claims about too much production are not correct.
The plan is not final, so Trump could still change his mind.
President Donald Trump is considering a new 7.5% tariff on Chinese goods, according to three people familiar with the deliberations.
The proposed tariff would target what Washington describes as China’s excess industrial capacity and underpriced exports.
Officials believe the measure could avoid disrupting the one-year US-China trade truce or a planned late-September meeting between Trump and Xi Jinping.
The tariff would be added to existing duties, including recent 10% to 12.5% tariffs linked to forced-labor enforcement concerns.
China has rejected claims of excess capacity, while the proposed US measure remains subject to change and has not been finalized.
- Who
- The Trump administration and Chinese officials are involved; President Donald Trump is considering the tariff, and Chinese President Xi Jinping is expected to meet Trump.
- What
- The United States is considering a 7.5% tariff on Chinese goods over alleged excess industrial capacity and underpriced exports.
- Where
- The proposed measure concerns trade between the United States and China.
- When
- The deliberations were reported on August 25, 2026; a Trump-Xi meeting is expected in late September.
- Why
- US officials say Chinese companies are producing excess goods and expanding overseas as domestic demand slows, potentially harming US commerce and companies.
U.S. administration’s position
China’s position
Excess capacity
U.S. administration’s position
The United States says China’s large industrial capacity and slowing domestic demand are pushing companies to sell underpriced goods in overseas markets.
China’s position
China has rejected claims that it has excess capacity and says it has never sought a large trade surplus.
Tariffs as a response
U.S. administration’s position
The administration is considering a tariff under a Section 301 investigation into practices it views as harmful to US companies or commerce.
China’s position
China and other affected countries have protested recent US tariffs and oppose Washington’s claims about unfair trade practices.
Key facts
- Proposed tariff
- 7.5% on Chinese goods
- Status
- Under consideration and not finalized
- Legal basis
- A formal excess-industrial-capacity investigation under Section 301 of the Trade Act of 1974
- Existing related tariffs
- Recent tariffs of 10% to 12.5% announced for 60 economies over forced-labor enforcement concerns
- Industries cited
- Autos, solar panels, cement and steel
- China’s trade surplus
- Nearly USD 1.2 trillion last year, according to the article
- Potential diplomatic context
- Officials believe the proposal would not endanger the one-year US-China trade truce or a planned late-September Trump-Xi meeting
Sources
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