Story perspectives

Busan Deal Caps US Forced-Labor Tariffs at 20%, Truce Ends November

7/28/2026

Summary

China Refutes Shock

China’s Ministry of Commerce rejected “China shock 2.0” claims and said China does not seek a trade surplus.
Premier Li Qiang called the situation a “China Opportunity 2.0” at Summer Davos.
U.S. imposed 10%-12.5% tariffs on China and economies for forced-labor violations and will probe 16 economies.
The European Union added e-commerce import restrictions on China, prompting Ankura expert Alfredo Montufar-Helu to warn Western markets will ignore China’s overcapacity stance.

Summary

Trump, Xi Truce

U.S. President Donald Trump and Chinese President Xi Jinping shook hands after bilateral talks in Busan, ending the trade truce.
The Busan summit deal caps U.S. replacement tariffs on Chinese goods at 20% and sets the truce to expire in November.
China’s Commerce Ministry said the United States replaced the 10% global duty on July 24 with a 12.5% replacement tariff after a Supreme Court ruling struck down earlier tariffs.

History

Historical Context

In March 2018 President Donald Trump signed a Section 301 memorandum ordering $50 billion of Chinese imports to face 25% tariffs, prompting China to retaliate with 15-25% duties on U.S. products. The EU responded with its own tariffs in June 2018. Those 2018 measures form the backdrop for today’s 10-12.5% U.S. duties and new EU e-commerce rules, underscoring lingering trade tensions.

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China Refutes Shock

China’s Ministry of Commerce rejected “China shock 2.0” claims and said China does not seek a trade surplus.
Premier Li Qiang called the situation a “China Opportunity 2.0” at Summer Davos.
U.S. imposed 10%-12.5% tariffs on China and economies for forced-labor violations and will probe 16 economies.
The European Union added e-commerce import restrictions on China, prompting Ankura expert Alfredo Montufar-Helu to warn Western markets will ignore China’s overcapacity stance.

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