U.S. President Donald Trump is preparing to impose new tariffs on China. He wants to penalize the world’s second-largest economy for flooding the global market with undervalued goods. This was reported by the AP agency on Monday, citing three informed sources. The tariff could amount to 7.5 percent.
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New tariff should not threaten trade truce
Government officials believe that the proposed tariff level should not threaten the annual trade truce between Washington and Beijing or Trump’s planned meeting with Chinese President Xi Jinping at the White House, scheduled for late September. This move, if approved, appears to be a calculated effort by the White House to circumvent the Supreme Court’s decision from earlier this year, according to AP. That decision thwarted Trump’s plan to implement an extensive system of high tariffs. Following this decision, the Trump administration announced in March that it was launching an official investigation into excess industrial capacity and forced labor regulations in China and other countries.
The White House and the Office of the U.S. Trade Representative (USTR) did not respond to requests for comment on tariff negotiations. The Chinese embassy in Washington said that economic and trade issues should be resolved through bilateral negotiations, not unilateral tariff measures. It also rejected claims that China has a problem with excess production capacity. The U.S. administration launched the investigation into China’s excess production capacity under Section 301 of the Trade Act of 1974, which allows the president to impose tariffs on countries that harm U.S. businesses or trade. The new tariff would add to the ten to 12.5 percent tariffs that Washington imposed in July on roughly 60 economies for insufficient enforcement of the ban on importing goods produced by forced labor.
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Chinese exports growing as Washington prepares more sanctions
This tariff was criticized by China and other countries. The tariff took effect when temporary tariffs expired, which Trump had imposed after the Supreme Court struck down in February his extensive tariffs on nearly all U.S. trading partners. Excess production in China affects a range of sectors – from automobiles to solar panels and cement to steel. Weaker domestic demand in China is forcing companies to seek markets abroad, which has led to sharp export growth in recent years and contributed to China’s record foreign trade surplus of nearly 1.2 trillion USD (24.8 trillion CZK) last year. However, China’s Ministry of Commerce claims that the country is not pursuing such a high trade surplus.
The U.S. Treasury Department warned on Monday that it is preparing new secondary sanctions targeting countries that trade with Iran, aimed at cutting off from international trade states that continue to trade with Tehran. China is Iran’s largest trading partner. Washington claims the sanctions are meant to further weaken Iran’s economy, which already faces the impact of previous sanctions as well as the effects of the U.S. naval blockade. However, U.S. Treasury Secretary Scott Bessent did not provide details and did not mention specific countries that might be affected by the new sanctions.
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Source: ÄŒTK
