What will the US tariff rate on China be on July 1?

TL;DR

My forecast is 22.6%, with the modal outcome being the Budget Lab’s current-law China rate of 22.22% on July 1, 2026 (Budget Lab data file, updated May 9, 2026).

Context

The current-law stack is narrower than the late-2025 stack. The Supreme Court held on February 20, 2026 that IEEPA does not authorize the president to impose tariffs (Learning Resources v. Trump, February 20, 2026). The replacement layer is Proclamation 11012: a 10% Section 122 surcharge effective February 24, 2026 through 12:01 a.m. EDT on July 24, 2026, with product exceptions and no stacking on the Section 232-covered part of an import (Federal Register, February 25, 2026). Legacy China Section 301 duties, Section 232 product duties, MFN rates, and 178 China Section 301 exclusions extended through November 10, 2026 remain part of the stack (USTR, November 26, 2025).

The best fit to the resolution language is the Budget Lab tariff tracker, because it estimates daily statutory effective tariff rates at the HTS-10 × country level, covers almost 20,000 HS10 products across about 240 trading partners, weights by 2024 Census import values, and distinguishes implemented law from announced policy (Budget Lab tracker, updated May 9, 2026). Its May 9 data file gives China at 22.22% on July 1, 2026, then 17.81% on July 24 after the current-law Section 122 expiry (Budget Lab data file, updated May 9, 2026).

Evidence

The historical base rate is a policy-step series, not a smooth economic series. PIIE puts the Biden-era China tariff baseline at 19.3% in February 2020 and 20.7% on January 20, 2025, before the 2025-2026 emergency-tariff cycle (PIIE, updated November 14, 2025). Customs-data measures then spiked: USAFacts reports China at 10.9% in 2024, 30.6% in 2025, 30.7% over January-February 2026, and 29.6% in February 2026, using estimated customs duties as a share of goods imports and updating the page on April 16, 2026 (USAFacts, updated April 16, 2026). That high customs reading is useful history, but it is not my main July 1 anchor because it is backward-looking and includes transition-month effects around the IEEPA reset.

The most relevant time series is the Budget Lab daily China series, collapsed here to monthly averages. Units are percentage points of tariff on imports from China; framing is statutory, pre-substitution, trade-weighted by 2024 Census import values; coverage is January 1, 2025 through the July 31, 2026 current-law projection shown here; sample size is roughly 20,000 HS10 products across about 240 trading partners; vintage is the May 9, 2026 data file (Budget Lab data file, updated May 9, 2026).

Two cross-checks put bounds around that 22.22% anchor. Budget Lab’s April 8 country table gives China at 23.9% if Section 122 is extended and 19.4% if it expires, using a pre-substitution country-level framework (Budget Lab April 8 report; Budget Lab Table 2 image). Penn Wharton, using USITC DataWeb customs duties divided by import value, reports China at 25.0% in March 2026 and the all-import U.S. rate at 7.1%, published May 12, 2026 (Penn Wharton Budget Model, May 12, 2026). I use Penn Wharton as a source-method upside check, not as the center, because the question asks for the rate in effect on July 1 rather than duty collections in a prior month.

The main downside is legal. The Court of International Trade ruled on May 7, 2026 against the Section 122 tariffs, but entered a permanent injunction only for the State of Washington, Burlap and Barrel, and Basic Fun, while dismissing the other state plaintiffs for lack of standing (CIT opinion, May 7, 2026). Skadden summarizes the practical effect as leaving all other importers subject to the 10% surcharge unless they sue, the administration withdraws the tariff, the tariff expires, or a broader court order issues (Skadden, May 20, 2026). Cooley reports that the government appealed and the Federal Circuit issued a temporary stay while it considers a broader stay pending appeal (Cooley, May 21, 2026). I therefore put 11% on Section 122 being removed or not counted broadly by July 1, centered near the Budget Lab post-expiry value of 17.81% (Budget Lab data file, updated May 9, 2026).

The main upside is a fast replacement or escalation. USTR opened Section 301 investigations on March 11, 2026 covering China and 15 other economies for structural excess capacity, with comments due April 15 and hearings starting May 5 (USTR, March 11, 2026; USTR, May 4, 2026). USTR also began the statutory four-year continuation process for the 2018 China Section 301 actions, with the first continuation window running May 7 to July 5, 2026 and the second running June 24 to August 22, 2026 (Federal Register, May 6, 2026). The May Trump-Xi summit produced boards of trade and investment, agriculture commitments, aircraft purchases, and rare-earth language, but no implemented broad tariff reset (White House, May 17, 2026). I treat pre-July 1 escalation as a tail, not the base case.

My quantitative distribution starts at the 22.22% Budget Lab July 1 value. I assign 67% to current policy with a Budget-Lab-like resolution, 9% to current policy but a higher customs-data or method-driven resolution near 24.8%, 11% to broad early Section 122 removal near 17.8%, 5% to negotiated cuts or extra carveouts near 20.5%, 5% to modest new Section 301 or Section 232 action near 27.5%, 2% to a stronger replacement or high-method outcome near 31.5%, and 1% to severe escalation above 40%. This gives a mean of 22.6%, a median of 22.2%, a 10th-90th percentile range of 18.7%-25.4%, about 3% probability above 30%, and about 0.8% probability above 40%.

What's non-obvious

The headline 10% Section 122 surcharge does not add 10 percentage points to China’s trade-weighted average. The Federal Register text excludes large product groups and bars stacking on Section 232-covered content (Federal Register, February 25, 2026). Budget Lab’s country table implies the Section 122 increment for China is about 4.5 points, from 19.4% without Section 122 to 23.9% with it (Budget Lab Table 2 image). That is why the right modal answer is near 22%, not near 30%.

The court loss is also less decisive than it sounds. The May 7 ruling was adverse to the government, but the injunction was not universal, and the Federal Circuit stay keeps the legal posture fluid (CIT opinion, May 7, 2026; Cooley, May 21, 2026). For a July 1 rate, that makes Section 122 removal a meaningful downside tail, not the central forecast.

Limitations

The largest measurement risk is the definition of “effective.” Budget Lab’s number is a daily statutory rate with fixed 2024 trade weights; Penn Wharton and USAFacts are customs-duty ratios using observed imports and collections, which can reflect liquidation lag, refunds, product substitution, and import timing (Budget Lab tracker, updated May 9, 2026; Penn Wharton Budget Model, May 12, 2026; USAFacts, updated April 16, 2026). The resolution wording points to Budget Lab’s statutory concept, but a later source using customs data could land a few points higher.

The largest event risk is still legal and administrative timing. A broad Federal Circuit or Supreme Court order before July 1 would push the answer toward 18%; a fast Section 301 or Section 232 remedy before July 1 would push it into the high 20s or low 30s. I did not find an OECD, World Bank, or USITC publication with a China-specific daily July 1, 2026 estimate, so the forecast leans on Budget Lab as the closest direct source and uses Penn Wharton and USAFacts only as method checks.