The Supreme Court struck down the administration’s broadest China tariffs in February 2026. China still faces the highest effective tariff rate of any major US trading partner at 33.9 percent. New Section 301 investigations launched in March could reset the entire framework again.
33.9% – Effective US tariff rate on Chinese imports as of January 2026 — highest of any major trading partner (Penn Wharton Budget Model)
$209B – Total tariff revenue collected January 2025–January 2026 across all US trading partners (Penn Wharton / USITC)
$1.2T – China’s global trade surplus in 2025 — a record, reached even as US imports from China fell sharply (PIIE)
According to the Penn Wharton Budget Model’s tariff tracker, China faces an effective US tariff rate of 33.9 percent as of January 2026 — the highest of any major American trading partner and roughly triple the pre-administration baseline. The legal foundation underpinning those rates shifted sharply on February 20, 2026, when the Supreme Court ruled that the International Emergency Economic Powers Act does not authorize tariff imposition, invalidating the mechanism behind the administration’s broadest China-specific measures. The administration responded with a 10 percent global tariff under Section 122 of the Trade Act of 1974, effective February 24, and by mid-March had launched new Section 301 investigations into China and 15 other economies through the US Trade Representative.
How the Escalation Unfolded Through 2025
The trajectory through 2025 was the steepest escalation in US-China trade relations since the original Section 301 tariffs of 2018. Beginning with 10 percent fentanyl-related tariffs in early 2025, the administration escalated through Liberation Day reciprocal tariffs in April that pushed bilateral rates toward 125 percent on each side. Peterson Institute for International Economics analysis found that US imports from China fell to levels not seen since 2009. China retaliated by restricting exports of rare earth permanent magnets, cutting off inputs the US auto industry depends on for motors and electronics. Ford CEO Jim Farley said in a June interview that factories had been idled and supply was hand-to-mouth. The restriction was global — US manufacturers could not source the same materials elsewhere.
Both governments pulled back from the brink. A 90-day tariff reduction in May 2025 brought bilateral rates toward 10 percent on each side. That truce was extended twice and formalised in November 2025 into a one-year agreement following a direct Trump-Xi meeting in South Korea. The US removed additional fentanyl-related tariffs; China suspended rare earth export controls on gallium, germanium, and antimony. The US Trade Representative extended Section 301 exclusions on 178 Chinese product categories through November 10, 2026. Neither side described the arrangement as a comprehensive deal.
The Current Tariff Structure on Chinese Goods
| Authority | Rate | Status |
|---|---|---|
| Section 301 (2018–2020) | 7.5%–25% by product | In effect; 178 exclusions extended through Nov. 10, 2026 |
| Section 122 global tariff | 10% (proposed rise to 15%) | In effect from Feb. 24, 2026; applies to all non-exempt imports |
| Section 232 — steel and aluminum | 50% | In effect; raised from 25% in June 2025 |
| Section 232 — autos and parts | 25% | In effect from March 2025 |
| Section 232 — semiconductors | 25% | In effect from January 2026 |
| IEEPA tariffs | Previously 10%–20% | Struck down by Supreme Court Feb. 20, 2026; replaced by Section 122 |
What the Section 301 Investigations Mean for the Outlook
The March 11, 2026 Section 301 investigations are significant because the original Section 301 tariffs on China survived legal challenge in ways that IEEPA tariffs ultimately did not. The USTR announced investigations into China and 15 other trading partners — including the European Union, Japan, Mexico, Vietnam, and Taiwan — over alleged structural excess capacity and unfair manufacturing subsidies. Public hearings are scheduled for April 28, with comment periods closing April 15. A positive finding gives the administration authority to impose additional tariffs on stronger legal footing than IEEPA provided. Analysts note that Trump’s planned late-March visit to Beijing could either accelerate confrontation or produce another framework agreement that reduces the need for new measures.
Key Open Questions, Spring 2026
- Tariff refunds:the Supreme Court’s February ruling left open whether importers who paid IEEPA tariffs in 2025 are entitled to refunds — a question with implications the Penn Wharton Budget Model estimates at up to $175 billion
- Beijing summit:Trump’s planned late-March visit could produce a broader framework superseding the Section 301 track — or collapse and accelerate new measures
- Critical minerals:China’s suspension of rare earth export controls expires under the one-year truce; no permanent agreement governs gallium, germanium, or permanent magnet supply
- Section 301 timeline:investigations typically take six to twelve months; any resulting tariffs would stack on top of existing Section 232 and legacy Section 301 rates already in force