"US Considers Additional 7.5% Tariff on China Ahead of September Summit"

Tariffs on Chinese Goods Could Rise to 20% If Imposed
Trade Truce Extension Also Expected to Be Discussed

AFP Yonhap News

Bloomberg reported on the 24th (local time) that the U.S. government is considering an additional 7.5% tariff on Chinese products ahead of the U.S.-China summit scheduled for next month. Analysts say this is a strategy to strengthen negotiation leverage by raising tariffs on Chinese goods before the summit.

Citing sources familiar with the matter, the outlet stated, "The U.S. government is reviewing the imposition of an additional 7.5% tariff on Chinese products based on the findings of its overproduction investigation under Section 301 of the Trade Act." The report also mentioned, "However, the final tariff rate has not yet been determined and could change depending on U.S. President Donald Trump's last-minute decision."

After the U.S. Supreme Court ruled in February to nullify retaliatory tariffs, the Trump administration launched forced labor investigations into 60 countries and overproduction investigations into 16 countries starting in March, aiming to replace the voided tariffs. Based on the results of the forced labor investigations announced in June, the U.S. is currently imposing a 12.5% tariff on Chinese products.

If the 7.5% overproduction tariff is added to the current tariffs, the total tariff rate on Chinese goods would rise to 20%. Bloomberg pointed out, "By adding an overproduction tariff, the tariff level on Chinese goods would be restored to the 20% rate that was in effect prior to the invalidation of retaliatory tariffs. This matches the ceiling that China indicated as acceptable in the U.S.-China trade war truce agreement."

The upcoming summit will address both the tariff issues and whether to extend the current trade truce. Last November, the two countries agreed to maintain the trade truce for one year; this period is set to expire on November 10. Accordingly, the forthcoming summit is expected to focus on the new tariff levels as well as the conditions for extending the existing trade truce.

However, there are doubts as to whether the U.S. can impose the additional tariffs in time. While the U.S.-China summit is scheduled to be held in Washington, D.C. on September 24, about a month from now, U.S. authorities have yet to announce the final results or details of the overproduction investigation. Jamieson Greer, representative of the Office of the United States Trade Representative (USTR), also stated in an interview with Bloomberg TV last month, "The overproduction investigation is more complicated than the forced labor investigation and will take more time." The USTR maintains that the timing of implementation, targeted industries, method of imposition, and tariff rates related to the overproduction investigation have not yet been decided.

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