Trump weighs 7.5% tariff on China over underpriced exports

Donald Trump is considering a 7.5 per cent tariff on Chinese goods over alleged market flooding. The move would deepen trade pressure while trying to preserve the fragile truce with Beijing.Image used for representational purposes onlyUS President Donald Trump is moving towards imposing a new tariff on China that would penalise it for flooding global markets with underpriced goods, according to three people familiar with the matter. The move would target the world’s second-largest economy and add to trade pressure from Washington.Two of the people, who spoke on condition of anonymity because internal discussions are still being finalised, said Trump is considering fixing the new tariff at 7.5 per cent. Administration officials believe that level would not jeopardise 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.If approved, the tariff would mark what appears to be a calibrated effort by the White House after a Supreme Court ruling earlier this year struck down Trump’s plan for a sweeping high-tariff regime not seen since the 1930s. After that decision, the administration said in March that it was launching formal investigations into excess industrial capacity and forced-labour regulations in China and other countries.It is not clear whether the US administration is also close to deciding on its probes into other economies it said it was investigating for unfair trade practices, including the European Union, Singapore, Switzerland, Norway, Indonesia, Malaysia, Cambodia, Thailand, South Korea, Vietnam, Taiwan, Bangladesh, Mexico, Japan and India. The White House and the Office of the US Trade Representative did not respond to requests for comment on the tariff deliberations, which Bloomberg News reported earlier on Monday. The Chinese embassy in Washington also did not immediately respond to a request for comment.The probe into China’s excess industrial capacity was launched under Section 301 of the Trade Act of 1974, which allows the US president to impose tariffs on countries found to be discriminating against US companies or commerce. The people familiar with the discussions said Trump could still change his mind on the new tariff. If imposed, it would come on top of tariffs of 10 per cent to 12.5 per cent announced last month on 60 economies that the Trump administration accused of not effectively enforcing a ban on goods made with forced labour.Many countries, including China, objected to that step. It took effect as temporary tariffs used by Trump expired after the Supreme Court in February struck down the sweeping “reciprocal” tariffs he had imposed on nearly every US trading partner.China last month rejected claims of overcapacity, anticipating that the US would soon announce the results of its probe and impose fresh tariffs. Large production capacity across several Chinese sectors, including automobiles, solar panels, cement and steel, has drawn increasing scrutiny from Beijing’s trading partners in recent years. While China’s leaders have prioritised rebalancing the economy, weak domestic demand has pushed companies to expand into overseas markets. Rising exports took China’s trade surplus to a record of nearly USD 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 tariff deliberations also come as the US Treasury Department warned on Monday that new secondary sanctions are being prepared against countries continuing to trade with Iran. China is Iran’s biggest trading partner. Treasury Secretary Scott Bessent gave few details and did not name the countries that could face those sanctions, but the warning added to the wider backdrop as the Trump administration weighs a new tariff on China.With PTI Inputs- EndsPublished By: India Today Web Desk Published On: Aug 25, 2026 03:38 IST