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Biden close to rollback of Chinese tariffs to fight inflation

Jenny Leonard and Eric Martin, Bloomberg News on

Published in Business News

Trump used Section 301 to hit China with the tariffs starting in July 2018 after an investigation concluded China stole intellectual property from American companies and forced them to transfer technology.

Some existing tariffs have hurt American consumers and businesses, even though tariff policy isn’t a cure-all for inflation, Yellen told lawmakers.

Commerce Secretary Gina Raimondo last month said the administration had decided to keep tariffs on steel and aluminum but was considering dropping them on other goods.

“There are other products — household goods, bicycles — it may make sense,” she said June 5 on CNN’s “State of the Union.”

U.S. Trade Representative Katherine Tai, on the other hand, has made clear she’s not convinced that any tariff moves would have an impact on price pressures. In a recent congressional hearing, she told lawmakers “with respect to short term challenges, there’s a limit to what we can do with respect to, especially inflation.”

 

And Biden is running the risk of irking unions as he mulls lifting some of the tariffs. Labor unions have opposed any such move, saying the levies help protect US factory jobs. Biden has repeatedly pledged to be the most pro-union president in U.S. history, and Democrats are counting on labor support in key midterm Congressional elections in November.

The White House has asked retail companies for a commitment to lower prices following any tariff cuts but executives rebuffed that request and told U.S. officials it was an unrealistic expectation, the people said.

The Biden administration has been weighing a new investigation into Chinese subsidies and their damage to the U.S. economy as a way to pressure Beijing on trade. That followed a phone call at the time between Biden and Xi in which Biden expressed frustration with the level of China’s engagement with his team.

While China’s economy has been hemmed in by COVID-related shutdowns, Chinese exports to the U.S. in the first five months of 2022 in dollar terms grew 15.1% on the year while imports rose 4%, according to official data.

©2022 Bloomberg L.P. Visit bloomberg.com. Distributed by Tribune Content Agency, LLC.

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