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China condemns US over new Section 301 tariffs – but holds off on retaliation

China's Ministry of Commerce condemned the US for new Section 301 tariffs of 12.5% on Chinese goods, calling them a textbook act of unilateralism and protectionism, but signaled it will hold off on retaliation for now, noting the duty stays within the 20% ceiling promised in earlier talks. Beijing also rejected US allegations that Chinese AI companies trained local models on American systems through distillation.

read1 min views1 publishedJul 27, 2026
China condemns US over new Section 301 tariffs – but holds off on retaliation
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Beijing also rejects allegations that Chinese companies trained local AI models on American systems

China’s Ministry of Commerce has objected to Washington’s latest tariff on the country’s goods but signalled it will hold off on retaliation for now, noting the 12.5 per cent duty keeps the United States within the ceiling that the Trump administration promised in earlier talks.

Section 301 investigationand the subsequent tariffs “a textbook act of unilateralism and protectionism”.

It added that the US had previously promised Beijing that tariffs on Chinese goods would not exceed 20 per cent while reserving “the right to take all necessary measures”.

The US imposed fresh tariffs of 10 to 12.5 per cent on 60 trading partners on Thursday, including China and allies such as the EU, Japan and South Korea, following the Section 301 investigation.

Washington has another Section 301 investigation under way into excess industrial capacity, covering 16 economies including China and the European Union.

In a separate statement published on the same day, the commerce ministry also rejected US allegations that Chinese AI companies had “distilled” American models – a practice that uses the outputs of larger systems to train smaller ones.

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