Trump may hold his ‘excess’ China tariff fire for now

The US is set to postpone announcing fresh tariffs related to alleged excess manufacturing capacity until after President Donald Trump's meeting with Chinese President Xi Jinping in Washington on September 24, according to Bloomberg. This decision comes mere days before the scheduled summit, with trade expected to be one of the primary topics on the agenda.

Initially, the Trump administration intended to release a report on excess manufacturing capacity prior to the summit, with a recommendation for an additional 7.5% tariff on Chinese goods. However, the current report suggests the reason for the delay is unknown, and the final tariff rate is still unclear. If the proposed 7.5% duty is implemented, it would raise the total additional US tariff burden on Chinese goods to around 20%, as previously reported by Bloomberg.

Beijing has previously indicated that a 20% ceiling aligns with the trade truce reached with Washington. The latest move occurs as both Washington and Beijing strive to maintain their trade truce while negotiating a long-term framework. As of July, the effective US tariff rate on imports from China stood at 22.8%, the highest among major US trading partners.

Despite the reduction in tariff levels, several sector-specific duties remain in place. The excess-capacity tariffs are part of a broader US strategy to rebuild its tariff framework following the Supreme Court's overturn of Trump's earlier global levies imposed under the International Emergency Economic Powers Act.