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Trump Looks to New China Tariff 08/25 06:12
WASHINGTON (AP) -- President Donald Trump is moving toward levying a new
tariff on China that would penalize the world's second-largest economy for
flooding the global market with underpriced goods, according to three people
familiar with the matter.
Two of the people, who spoke on condition of anonymity to discuss internal
deliberations still being finalized, said Trump is considering setting the new
tariff at 7.5%. It's a level administration officials believe would not
endanger the one-year trade truce between Washington and Beijing or a planned
White House meeting between Trump and Chinese President Xi Jinping expected to
take place in late September.
The move, if finalized, appears to be a calibrated effort by the White House
to work around a Supreme Court decision earlier this year that struck down
Trump's plan to implement a sweeping, high-tariff scheme not seen since the
1930s.
After that decision, the Trump administration announced in March it was
launching formal investigations targeting excess industrial capacity and
forced-labor regulations in China and other nations.
It isn't clear if the U.S. administration is also nearing its decision in
its probes of the other economies that it announced it was investigating for
unfair trade practices, including the European Union, Singapore, Switzerland,
Norway, Indonesia, Malaysia, Cambodia, Thailand, South Korea, Vietnam, Taiwan,
Bangladesh, Mexico, Japan and India.
The White House and the U.S. Trade Representative's office did not respond
to requests for comment on the tariff deliberations, which Bloomberg News
reported earlier Monday.
The Chinese embassy in Washington said in a statement that economic and
trade issues should be resolved through bilateral talks rather than unilateral
tariff actions, and rejected the idea that it has an issue with overcapacity.
The excess industrial capacity probe of China was initiated under Section
301 of the Trade Act of 1974, which allows the president to levy tariffs
against nations that discriminate against U.S. companies or commerce.
The new tariff would come on top of existing tariffs on China
The people familiar with the deliberations stressed that Trump could still
change his mind on the new tariff on China.
It would come on top of tariffs of 10% to 12.5% announced last month for 60
economies around the globe that the Trump administration accused of failing to
effectively enforce a ban on goods produced with forced labor.
Many countries, including China, protested that move, which took effect just
as the clock ran out on temporary tariffs Trump had turned to after the Supreme
Court in February struck down sweeping "reciprocal" tariffs he levied on nearly
every U.S. trade partner.
China last month pushed back against claims of overcapacity, anticipating
that the U.S. would soon release results of its probe and impose new tariffs.
Massive capacity in a slew of Chinese industries, from autos to solar
panels, cement and steel manufacturing, has drawn increased attention from
Beijing's trading partners in recent years.
Although China's own leaders have prioritized rebalancing the economy,
slowing domestic demand has prompted companies to expand into overseas markets.
Surging exports pushed China's trade surplus to a record of nearly $1.2
trillion last year.
China has never sought a large trade surplus, the Ministry of Commerce said
in a recently published report titled "China's Position on the So-called Excess
Capacity Issue."
The deliberations come as the Treasury Department on Monday warned countries
doing trade with Iran that new secondary sanctions are in the pipeline aimed at
ostracizing nations that continue to do business with Tehran. China is Iran's
biggest trade partner.
Washington has promised the new sanctions would put even more pressure on an
Iranian economy already battered by previous sanctions and a U.S. naval
blockade as the U.S. and Israeli war against Iran nears the six-month mark.
Treasury Secretary Scott Bessent's announcement Monday provided little
detail and did not name which countries could face secondary sanctions.
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