Trump readies a new tariff to punish China for its flood of cheap exports—without endangering his trade truce or his summit with Xi Jinping

President Donald Trump is considering imposing a new tariff on China, reportedly at a rate of 7.5%, to counter China's flood of inexpensive exports, according to three sources familiar with the ongoing deliberations. This proposed tariff would not compromise the one-year trade truce between the United States and China, nor the anticipated meeting between President Trump and Chinese President Xi Jinping in late September.

The new tariff would be added to the existing 10-12.5% tariffs imposed last month on 60 nations accused of not effectively enforcing a ban on forced labor-produced goods. China has previously challenged the administration's move, which came into effect as Trump's previous sweeping tariffs were set to expire. The Chinese economy has seen a massive expansion of industrial capacity, particularly in sectors like autos, solar panels, cement, and steel manufacturing, in response to weakening domestic demand.

Despite prioritizing economic rebalancing, China's trade surplus reached a record of nearly $1.2 trillion last year. The United States has launched investigations into excess industrial capacity and forced-labor regulations in China and other countries, following a recent Supreme Court ruling that overturned Trump's previous high-tariff plan.

The Treasury Department warned foreign countries about new secondary sanctions against Iran, which could impact China as a major trading partner. The White House and the U.S. Trade Representative's office did not respond to queries regarding the tariff deliberations.