The United States plans to impose a 7.5% tariff on Chinese imports under a Section 301 investigation into excess manufacturing capacity, bringing the total tariff rate on China to roughly 20% under President Donald Trump’s second term. The announcement is expected before the September 24 summit in Washington between Trump and Chinese President Xi Jinping, according to U.S. officials.
The tariff would be implemented under the Section 301 framework of the Trade Act of 1974, following the Supreme Court’s invalidation of earlier tariffs issued under the International Emergency Economic Powers Act. The USTR launched its excess capacity probe into more than a dozen trading partners in March 2026, with a separate forced labor investigation concluding in June, resulting in tariffs of 10–12.5% on 60 economies.
Washington has previously committed to capping replacement tariffs on Chinese goods at 20%, with the current rate at 12.5%. The planned 7.5% tariff would fill the remaining headroom. One option under consideration is to announce a higher headline duty rate while suspending part of it to achieve the effective 7.5% rate.
China’s Commerce Ministry confirmed the U.S. commitment to the 20% cap in a statement on July 27, warning it would ‘closely monitor and fully assess subsequent U.S. measures, and reserve the right to take all necessary measures.’ The bilateral trade truce between Beijing and Washington is set to expire on November 10.
The Section 301 investigation into overcapacity was initiated amid ongoing trade tensions, with the U.S. refunding approximately $81–100 billion in duties collected under the struck-down IEEPA authority.
