The United States is poised to delay the announcement of new tariffs on China and other key trading partners, aiming to leverage the threat of these tariffs in upcoming trade negotiations. This decision comes as U.S. President Donald Trump prepares to meet with Chinese President Xi Jinping, marking Xi’s first visit to the U.S. since 2023.
The Trump administration had been readying a report on China’s industrial capacity, with expectations of recommending a 7.5% tariff on Chinese imports. Such a move would raise the overall tariff rate to approximately 20%, a threshold China has previously indicated aligns with the current trade truce. The delay in announcing these tariffs is seen as a strategic measure to bolster the U.S. position in ongoing talks.
Prior to the leaders’ meeting, U.S. and Chinese negotiators are set to engage in discussions aimed at ironing out potential trade agreements. The summit between Trump and Xi is crucial as both nations seek to address and resolve outstanding trade issues, with tariffs remaining a contentious point in their economic relationship.
In March, the Trump administration initiated investigations into over a dozen major trading partners under Section 301 of the Trade Act of 1974, citing concerns over excess industrial capacity. Any new tariffs resulting from these investigations would add to current duties, intensifying trade pressure on China and others.
China has signaled that it could retaliate if U.S. tariffs exceed the levels established under the existing trade truce. Chinese officials argue that the issue of excess capacity should not be used to justify protectionist policies. As the summit approaches, both countries are keen to negotiate trade commitments, with the shadow of potential tariffs looming over the discussions.