The U.S. Trade Representative is preparing to impose a 7.5% tariff on Chinese imports under a Section 301 investigation into alleged production overcapacity, according to officials familiar with the matter. The move comes as the administration finalizes findings ahead of the scheduled September 24 summit between President Trump and Chinese counterpart Xi Jinping in Washington.
The proposed tariff would push total U.S. substitution tariffs on Chinese goods to 20%, matching a ceiling Washington committed to in a July 2025 communication with Beijing. Current substitution tariffs stand at 12.5%, following a separate forced-labor investigation that concluded in June and applied rates of 10% to 12.5% across 60 economies. The overcapacity probe, launched in March 2026, has taken longer to complete due to its complexity, USTR spokesperson Jamieson Greer told Bloomberg Television in July.
The administration is considering options to implement the 7.5% rate, including announcing a higher nominal tariff while suspending part of it to achieve the effective rate. Specific suspension details and timelines remain under negotiation. The Section 301 investigation follows the U.S. Supreme Court's invalidation of previous tariffs based on the International Emergency Economic Powers Act, forcing the administration to rely on alternative legal authority.
China's Ministry of Commerce stated in a July 27, 2025 response that it would "closely monitor and fully evaluate subsequent U.S. measures" and reserved the right to take "necessary actions." The bilateral trade truce between Beijing and Washington is set to expire on November 10, 2026, increasing pressure on both sides to reach a framework before then.
