The numbers come first: President Trump is considering a new 7.5% tariff on China, according to three people familiar with internal deliberations, as reported by Fortune and the Associated Press on August 24, 2026. Two of those sources, speaking anonymously because the discussions are still being finalized, said administration officials believe that level would not endanger the one-year trade truce between Washington and Beijing—or a planned White House meeting with Chinese President Xi Jinping expected in late September.
The move is framed inside the administration as a workaround after the Supreme Court struck down Trump's earlier plan for a sweeping, high-tariff scheme earlier this year. Following that ruling, the Trump administration announced in March it was launching formal investigations targeting excess industrial capacity and forced-labor regulations in China and other nations. The excess industrial capacity probe 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 potential tariff would stack on top of levies of 10% to 12.5% announced last month for 60 economies the Trump administration accused of failing to effectively enforce a ban on goods produced with forced labor. China was among the countries that protested that move, which took effect just as temporary tariffs—Trump's stopgap after the February Supreme Court decision—expired.
Beijing has pushed back hard. China's trade surplus hit a record of nearly $1.2 trillion last year, driven by surging exports as slowing domestic demand pushed Chinese companies into overseas markets. Massive capacity across autos, solar panels, cement, and steel has drawn scrutiny from trading partners worldwide. China's Ministry of Commerce, in a report titled 'China's Position on the So-called Excess Capacity Issue,' stated that China has never sought a large trade surplus.
The White House and the U.S. Trade Representative's office did not respond to requests for comment. The Chinese embassy in Washington also did not immediately respond. The people familiar with the deliberations stressed that Trump could still change his mind.
Separately, on the same day, Treasury Secretary Bessent announced that new secondary sanctions targeting countries doing business with Iran are in the pipeline. China is Iran's biggest trade partner. Bessent's announcement provided little detail and did not name which countries could face secondary sanctions.
CEO Times read: A 7.5% tariff is a scalpel, not a sledgehammer—and that is precisely the point. The administration is threading a needle: punish Beijing's export dumping, satisfy the legal constraints imposed by the Supreme Court, and preserve the diplomatic runway needed for a September summit. For American manufacturers competing against subsidized Chinese steel, solar panels, and autos, even a modest levy signals that Washington has not abandoned the field. The harder question is whether calibrated pressure moves the needle on an industrial policy in Beijing that has been years in the making. Capital rewards clear rules; what markets need now is certainty about where the final tariff line lands—and whether the Xi meeting delivers anything beyond a photo opportunity.
