US weighing 7.5% tariff on Chinese goods over overcapacity, Bloomberg reports

The United States is considering imposing an additional 7.5 percent tariff on Chinese goods on grounds of overcapacity, ahead of a planned US-China summit in September.

Bloomberg reported Tuesday, citing anonymous sources familiar with the matter, that the US government plans to levy an additional 7.5 percent tariff targeting China's excess production capacity.

If imposed, the new tariff would push the total rate of additional duties the Trump administration has placed on China back up to around 20 percent.

China had earlier said it agreed to cap additional US tariffs on Chinese goods at around 20 percent, a level it considers consistent with the bilateral trade truce.

Bloomberg characterized the move as part of Trump's effort to rebuild his protectionist trade policy following a Supreme Court ruling that struck down existing import tariffs as unconstitutional.

Some analysts say the measure is designed to maximize pressure on Beijing without pushing tariffs above the agreed ceiling in a way that would reignite trade tensions.

However, sources said the exact tariff rate has not been finalized. Trump has frequently changed trade-related announcements at the last minute or added new demands, meaning the actual figure could still change.

One option under discussion would involve announcing a higher headline tariff rate on China while suspending some duties to bring the effective rate down to 7.5 percent, according to one official.

Details — including which tariffs would be suspended, by how much, and for how long — are still being negotiated, sources said.

The two countries are also exploring an extension of their one-year trade truce, which is set to expire Nov. 10, officials said.

In March, the Trump administration launched investigations into more than 12 major trading partners under Section 301 of the Trade Act of 1974, citing concerns over excess production capacity.

US officials hope to release the findings of those investigations before Trump and Chinese President Xi Jinping hold a summit in Washington on Sept. 24.

Asked about the tariff plans, a White House official said all announcements would come directly from the administration and that current reports and discussions should be treated as unfounded speculation.

Section 301 of the US Trade Act authorizes the US Trade Representative, at the president's direction, to impose tariffs when another country's trade practices are found to be discriminatory toward American businesses or to violate US rights under international trade agreements. Moves to impose tariffs under that authority have already drawn legal challenges, however.

A coalition of 25 states — including New York, California and Illinois — filed a lawsuit in the US Court of International Trade earlier this month.