The “Trump-Xi summit” is set to take place next Thursday (September 24) in Washington, D.C. According to sources with knowledge of the matter, the Trump administration had originally planned to release, ahead of the meeting, an investigative report on the “overcapacity” problem in China and other economies, and was considering an additional 7.5% tariff on Chinese goods imported into the U.S. However, on the eve of the summit, the U.S. side decided to postpone the release of the report and the related tariff measures, which will only be formally unveiled after the meeting concludes.
Bloomberg reported that if the U.S. finalizes the additional 7.5% tariff on Chinese goods, combined with the 12.5% “forced labor tariff” implemented in July this year, new tariffs on China under Trump’s second term would total 20%, returning to the level seen during the U.S.-China tariff truce. Beijing has previously stated that a 20% rate is consistent with the earlier U.S.-China trade truce agreement.
Analysts suggest that the U.S. decision to hold off on announcing the new tariffs at this sensitive moment before the “Trump-Xi summit” may be aimed at creating a positive atmosphere for the talks and avoiding inflaming friction between the two sides ahead of the meeting.
On March 11, the Office of the U.S. Trade Representative (USTR), under Section 301 of the Trade Act of 1974, launched an investigation into “structural overcapacity and manufacturing production” targeting 16 economies including China, Japan, South Korea, Taiwan, and the European Union. The investigation assesses whether governments’ subsidy policies and capacity expansion measures could lead to low-priced exports and overcapacity, thereby harming the interests of U.S. businesses.
Beyond the overcapacity issue, the USTR also launched Section 301 investigations into 60 other major trading partners, examining each country’s controls on goods made with forced labor and whether relevant regulations are actually being enforced. After months of investigation, the U.S. announced its final course of action on July 23, imposing tariffs of 10% or 12.5% on imports from different economies, with only certain countries and specific goods and raw materials exempted.
Notably, in February this year, the U.S. Supreme Court ruled that the International Emergency Economic Powers Act (IEEPA) does not grant the president the power to impose tariffs, meaning the tariffs implemented by the Trump administration under the act lacked legal grounds, and ordered Washington to refund the duties collected. The refund process has been handled by agencies including U.S. Customs and Border Protection (CBP); as of the end of July, approximately US$100 billion in tariffs had been refunded.
