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.