Trump may hold off on new capacity tariffs as Xi meeting draws closer: Report

The US is expected to delay announcing new tariffs linked to allegations of excess manufacturing capacity until after President Donald Trump meets Chinese President Xi Jinping in Washington on September 24, Bloomberg reported, citing people familiar with the matter.

The delay comes just days before the leaders are due to meet, with trade expected to be one of the key issues on the agenda.

The Trump administration had earlier planned to release a report on excess manufacturing capacity before the summit. Bloomberg reported in August that the report was expected to recommend an additional 7.5% tariff on Chinese goods. The latest report, however, says the reason for the delay is unclear and it remains uncertain whether the final tariff rate will stay at that level.


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If the proposed 7.5% duty is imposed, it would take the additional US tariff burden on Chinese goods to around 20%, according to the earlier Bloomberg report. Beijing has previously said that a 20% ceiling is consistent with the trade truce reached with Washington.

The latest move comes as Washington and Beijing try to keep their trade truce intact while negotiating a longer-term framework. The effective US tariff rate on imports from China stood at 22.8% in July, according to the Penn Wharton Budget Model. That was the highest effective rate among major US trading partners.

The two countries have come down a long way from the tariff levels reached during last year's escalation. In April 2025, US tariffs on Chinese goods had risen to 145%, while China responded with tariffs of 125%. Both sides have since reduced the rates, although several sector-specific duties remain in place.

The excess-capacity tariffs are part of a wider US effort to rebuild its tariff framework after the Supreme Court struck down Trump's earlier global levies imposed under the International Emergency Economic Powers Act. The administration has since been pursuing other legal routes, including investigations under Section 301 of the Trade Act of 1974.

In March, the US Trade Representative opened Section 301 investigations into 16 economies over what it described as structural excess capacity and production in manufacturing. The list includes China, India, the European Union, Japan, South Korea, Vietnam, Mexico and several Southeast Asian economies.

Also Read: Tariffs, supply risks push Indian auto parts makers to build beyond China

The US says the investigations will examine whether foreign government policies and practices contribute to excess production that affects US commerce. USTR has said the probe is focused on manufacturing sectors where production capacity may have grown beyond domestic and global demand.

For China, the tariff issue comes on top of other disputes involving trade, technology and critical minerals. US-China trade totalled $400.8 billion in the first eight months of 2026, up 5.4% from the same period a year earlier, based on Chinese customs data. Chinese exports accounted for about 75% of that trade.

Tariffs are expected to be a central issue when Trump and Xi meet. The two sides are also dealing with disagreements over rare earths, technology and the broader balance of trade. The countries are discussing a tariff-reduction framework covering $30 billion of products on each side.

Meanwhile, Chinese Foreign Minister Wang Yi spoke with US Secretary of State Marco Rubio on September 17. China’s Foreign Ministry said the two discussed high-level exchanges between the two countries as well as the situation in the Middle East. Wang said the next stage of high-level engagement should be based on equality, respect and mutual benefit.

The White House and the Office of the US Trade Representative did not respond to requests for comment on the reported delay. Inside US Trade first reported that the tariff announcement could be pushed back.

(WIth inputs from Bloomberg)