The administration of U.S. President Donald Trump plans to delay announcing new tariffs linked to what it describes as excess manufacturing capacity among its trading partners until after the scheduled summit between Trump and Chinese President Xi Jinping in Washington on Sept. 24, Bloomberg reported, citing people familiar with the matter.
The U.S. administration had planned to issue a trade report on excess production capacity before the presidents’ meeting, but the announcement will be delayed until after the summit. The report had been expected to recommend a 7.5% tariff on Chinese goods, although the final rate could differ from the level previously under consideration.
China tariffs could reach about 20%
If a 7.5% tariff is adopted, tariffs imposed by the Trump administration on China during his second term would rise to about 20%, a level Beijing has previously indicated is consistent with the trade truce in place with Washington.
Investigation covers 16 economies
The move comes as part of a trade investigation launched by the Trump administration in March under Section 301 of the Trade Act of 1974. It covered China, South Korea, Japan and 13 other economies to examine practices Washington considers unfair and linked to structural excess production capacity.
The administration also launched a separate investigation that month covering 60 economies, including China, Japan and South Korea, to determine whether their governments had taken sufficient measures to prevent imports of goods produced using forced labor.
New legal pathways for imposing tariffs
In July, the Office of the U.S. Trade Representative announced its final decision to impose new tariffs of up to 12.5% on South Korea, Japan and 58 other trading partners, citing concerns related to forced labor.
Through the investigations conducted under Section 301, the U.S. administration is seeking to establish new legal pathways for imposing tariffs after the Supreme Court struck down in February the emergency tariffs Washington had imposed unilaterally on countries. Tariffs linked to excess production capacity, together with those imposed over forced labor, are expected to raise tariff levels on a number of trading partners.
