China is preparing for the possibility of new U.S. tariffs amid the expiration of temporary duties imposed earlier this year, with analysts projecting limited immediate impact but a potential for longer-term strategic adjustments in bilateral trade relations.

The 10 percent global tariffs implemented under Section 122 of the Trade Act are set to expire soon, clearing the way for the United States to pursue more targeted tariffs under Section 301. This shift, announced by U.S. Trade Representative Jamieson Greer, would allow Washington to impose duties on imports from approximately 60 economies, including China, based on allegations of unfair trade practices such as inadequate intellectual property protections and supply chain vulnerabilities.

Speaking recently on CNBC, Greer indicated that action could occur soon but did not provide a firm timetable. The proposed tariffs under Section 301 could reach rates of up to 12.5 percent, expanding the U.S. government’s flexibility compared with the broader emergency tariffs formerly in place.

Economists suggest that this framework offers a more enduring tool for Washington to address trade imbalances, national security concerns, and intellectual property issues, rather than a one-off measure. Alicia Garcia-Herrero, chief economist for Asia-Pacific at Natixis, described the approach as a continuation of the reciprocal trade strategy that the Trump administration previously embedded in negotiations, including the phase one trade deal.

Despite recent easing in tensions, marked by President Donald Trump’s visit to Beijing in May and a recovery in China’s exports to the U.S., the new tariffs signal Washington’s commitment to “managed competition” rather than a comprehensive reset of relations. Garcia-Herrero anticipates restrained Chinese responses such as targeted tariffs, regulatory barriers, or export controls, alongside efforts to maintain diplomatic dialogue to prevent broader economic repercussions.

Historically, labor-related concerns, particularly around supply chains linked to Xinjiang, have served as friction points, underpinning some U.S. restrictions. Xu Tianchen, senior economist at the Economist Intelligence Unit, forecasted that Washington might broaden its tariff application with additional Section 301 measures addressing overcapacity and Section 232 investigations focused on national security in certain sectors. Xu noted that the new tariffs would modestly increase the average U.S. tariff rate on Chinese goods by roughly one percentage point from the current average of about 22 percent, with a possible ceiling around 32 percent based on bilateral communications.

From the Chinese perspective, Alfredo Montufar-Helu, managing director at Ankura Consulting, characterized the forthcoming tariffs as largely anticipated. He cautioned that while China would publicly oppose the measures, they are unlikely to disrupt the strategic stability framework established during the May summit in Beijing. This understanding reflects China’s expectation that U.S. tariffs will remain below the threshold agreed upon at the Kuala Lumpur talks last year. Any surpassing of that ceiling could prompt retaliatory actions from Beijing.

Recent official data confirm that Chinese exports to the U.S. have maintained strong momentum, posting double-digit year-on-year gains for the third consecutive month in June. At a recent press briefing in Beijing, officials from the General Administration of Customs emphasized that improvements in bilateral relations have contributed to a more stable environment for both bilateral and global trade.

As the tariff framework evolves, both sides appear poised to navigate a complex balance between enforcement measures and diplomatic engagement, aiming to manage competition without escalating into broader economic conflict.