US Weighs 7.5% Tariff on China; Switzerland Could Be Hit Too

The Trump administration is preparing to impose an additional 7.5% tariff on Chinese imports, citing alleged overcapacity in Chinese manufacturing. Bloomberg reported the plan on August 24. China’s Ministry of Commerce rejected the proposal on August 27 and warned it would take retaliatory measures if implemented. Switzerland could also face tariffs under the same Section 301 investigation launched in March.

Why the tariff is being considered

The US investigation under Section 301 of the 1974 Trade Act targets 16 economies, including China. Washington alleges that Chinese manufacturers have excess production capacity. The US Supreme Court invalidated previous tariffs on April 2, 2025, forcing the Trump administration to find new legal grounds. The Section 301 investigation allows the government to investigate unfair trade practices and impose measures in response.

China’s response and threat of retaliation

Chinese Ministry of Commerce spokesperson Huang Lin stated on August 27 that the US has politicized trade issues and acted unilaterally and protectionally. China rejects the overcapacity allegations, arguing that production should be evaluated globally rather than against domestic demand alone. Huang Lin said China reserves the right to take all necessary measures if the tariff is implemented. The final tariff amount has not yet been decided.

Timing amid diplomatic efforts

Chinese Foreign Minister Wang Yi met with US Ambassador David Perdue on August 28 and called for both nations to “remove disruptions and overcome obstacles” ahead of Xi Jinping’s expected visit to Washington on September 24. Trump and Xi previously met in Beijing in May 2026 and pledged to maintain a trade truce. Switzerland could also be affected by the tariff measures, though details remain unclear. The new tariff proposal threatens to undermine the fragile détente between the world’s two largest economies.

What remains uncertain

The 7.5% figure is not yet final. The US has said it will continue to monitor developments. China’s Ministry of Commerce released a position paper on July 28 arguing that Chinese export growth stems from production scale, innovation, and global demand related to the green energy transition, not overcapacity. The exact scope of which Swiss or other economies’ goods would be affected has not been specified.

Final Thoughts

The proposed 7.5% tariff on China remains under review and could trigger a trade war just weeks before Xi’s September visit to Washington. Investors should monitor the final decision and Beijing’s response closely, as tariff escalation would ripple through global supply chains and equity markets.

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