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President Trump considers 7.5% tariff on Chinese goods to address manufacturing overcapacity

President Trump is moving toward imposing a new 7.5% tariff on Chinese goods to penalize the world's second-largest economy for flooding the global market with underpriced products. The administration announced that this move is a calibrated effort to address structural excess capacity, specifically targeting industries such as autos, solar panels, and steel. This new levy would restore President Trump's second-term duties on China to approximately 20%, a level Beijing has previously indicated is consistent with its current trade truce with Washington. The administration announced that the move follows a Supreme Court decision that struck down a sweeping high-tariff scheme earlier this year. To work around this ruling, the administration announced it was launching formal investigations into unfair trade practices and forced-labor regulations across 16 economies, including the European Union, Japan, and India. While China has rejected the idea of overcapacity, the administration announced that the new tariff aims to resolve trade imbalances caused by government intervention and subsidies.

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