Washington is preparing another tariff hit on Chinese goods, bad news for Chinese exporters but framed as mild enough to keep trade talks alive.

• Trump is weighing an extra 7.5% tariff on China to punish cheap goods flooding world markets.
• That would push his second-term tariff rate on China back to about 20%.
• One option is to announce a higher rate but hold part of it back, keeping the real rate at 7.5%.
• US officials think a rate this size will not blow up the one-year trade truce or the planned late-September meeting between Trump and Xi.
• The same overcapacity probe also covers Taiwan, the EU, Japan, South Korea, India, Mexico and others, so more countries could be hit.

Outlook: Washington wants the findings out before the September 24 meeting, while both sides try to extend the trade truce that expires November 10.