Beijing Reports Washington Pledged to Limit New Tariffs on Chinese Imports to 20%

Beijing announced that Washington had agreed to set a maximum of 20% on replacement tariffs for Chinese products, establishing a ceiling for future hikes following a fresh tariff action by President Donald Trump.

On Monday, China's Commerce Ministry revealed this pledge for the first time, stating that the U.S. offered it in the course of trade negotiations. By noting the existing replacement tariff stands at 12.5%, China seemed to indicate that Washington retains 7.5 percentage points of leeway for further hikes before hitting the agreed limit.

The fresh tariffs from the Trump administration arrived as the President erects a new protectionist barrier following the Supreme Court's invalidation of his earlier duties. These levies match the rates the U.S. suggested last month for 60 trade partners, claiming those nations had not done enough to combat forced labor. The updated tariffs substitute for a 10% global duty that lapsed on July 24.

In a separate development, the U.S. previously started a probe into China, citing suspected excess production capacity; the results of that investigation might lead to yet more tariffs.

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According to the statement, China's countermeasures against the initial U.S. fentanyl duties and reciprocal tariffs are still active. The ministry further condemned the U.S. for levying tariffs on forced labor grounds, noting that China has built a full legal system to prevent and fight such practices.

"We will continue to closely monitor and fully assess subsequent US measures, and reserve the right to take all necessary measures," the ministry said. Washington was called upon to amend its "erroneous practices," eliminate unilateral tariffs, and persist in settling disputes via dialogue.

Beijing said the U.S. indicated these levies would replace those previously imposed using the IEEPA and Section 122 surcharges.

The fact that China has not immediately retaliated suggests a continued thaw in relations, largely due to a tariff truce in a tariff fight that last year had sent U.S. duties on Chinese goods soaring to 145%.

Context of the Trade Truce

The one-year truce has contributed to easing tensions, but its expiration in November looms large. Under the pact, the truce has resulted in the halting of certain tariffs, restrictions on rare earths, and inquiries into Chinese shipbuilders. China has indicated a willingness to accept some tariff increases to previously negotiated levels in exchange for extending the truce, as expressed in May. The 20% ceiling on replacement tariffs offers a measure of predictability, yet the ongoing overcapacity probe and forced labor allegations keep the relationship fragile.

Per the conditions of a pact struck in Malaysia last October, the average tariff on Chinese imports to the U.S. hit about 30%, then fell after the Supreme Court overturned some duties.

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