Biden Poised To Lift Trump-Era Tariffs On China As US Economy Teeters On Recession
The Biden administration is reportedly planning to lift some tariffs on Chinese imports as it seeks to balance maintaining economic pressure on Beijing and address domestic inflation.
The announcement would likely include the lifting of tariffs on consumer goods like clothing or school supplies, and has been delayed due to major disagreement within the administration, The Wall Street Journal reported.
One group of Biden advisors led by Treasury Secretary Janet Yellen has argued that tariffs raise prices and drag down the economy at a time when the U.S. is facing inflation and a possible recession, while members of another camp that includes Trade Representative Katherine Tai and National Security Adviser Jake Sullivan are telling the president not to forfeit strategic leverage by reducing tariffs without getting anything substantive in return, the WSJ added.
A spokesperson for the White House did not confirm or deny that a decision has been made, but directed The Daily Caller News Foundation to comments made by White House Press Secretary Karine Jean-Pierre on June 14, that “some Trump tariffs were irresponsible and do not advance our economic or national security and instead raise costs for families and businesses… we’re discussing this and working to align these haphazard tariffs and our priorities to safeguard the interest of our workers and critical industries.”
Barclay’s (like others): removing tariffs on China predatory practices will have no real impact. China will be able to export $90B more. Then a new case might be considered. I’m all for that, but if current retaliation is a problem, what will you do then? https://t.co/4YywO3WnWF
— Michael Wessel (@MWesselDC) July 5, 2022
On Monday Secretary Yellen had a call that the Treasury Department described as “candid and substantive,” with her counterpart in Beijing, Liu He. The parties reportedly discussed the “impact of Russia’s war against Ukraine on the global economy and unfair, non-market PRC economic practices.” The Treasury Department’s readout does not mention tariff reductions, but does note that Secretary Yellen “looks forward to future discussion with Vice Premier Liu.”
Economists cited by the WSJ suggest that removing the tariffs won’t have a massive impact on curbing inflation, and would likely only reduce the consumer price index by about 0.26% in the near term.
Proponents of the tariff reduction, however, think the move would signal that President Biden is serious about fighting rising prices, reported the WSJ. With the Federal Reserve primarily in charge of keeping inflation in check, tariff reduction is one of just a handful of policies that a president can pursue.
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