Biden administration divided over removing China tariffs
3 Min Read
Officials in the Biden administration are divided over whether to lower some tariffs against China to ease inflation.
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(Reuters)
Sources familiar with the matter have told Axios that Biden administration officials are contemplating how — and even if — to drop some of former President Trump's tariffs against China to help relieve inflation.
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The government has few alternatives for lowering costs for American consumers, but it is well aware that higher prices will be penalized in this fall's midterm elections if they continue throughout the year.
Providing so-called "exclusions" for certain commodities — without subjecting them to Trump's Section 301 tariffs — is one weapon at the current president's disposal.
However, Biden, like his predecessor, has taken a hostile posture towards China, and officials have been hesitant to lower tariffs without receiving anything in exchange.
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In August 2019, Trump issued a $300 billion trade sanction on China, claiming that Beijing had failed to follow through on agreements to buy more American agricultural products and reduce fentanyl sales.
Daleep Singh, the deputy national security advisor in charge of sanctions, publicly listed a number of prospective consumer items that may be prohibited last Thursday.
During an event, he stated "For product categories that are not implicated by those objectives, there's not much of a case for those tariffs being in place," asking "Why do we have tariffs on bicycles or apparel or underwear?"
In a TV interview with Bloomberg, Yellen stated that lowering some tariffs was "worth considering" and "something we're looking at."
Biden has not reached a final decision, and officials are yet to have a united plan.
White House press secretary Jen Psaki stated Monday that “From the beginning of the administration, we talked about how some of the tariffs implemented by the previous administration were not strategic and, instead, raised costs on Americans," adding that the ongoing effort "has been to ensure current Section 301 tariffs align appropriately with our economic and trade priorities.”
Rep. Tim Ryan of Ohio told Axios that "Lifting tariffs on so-called 'non-strategic' goods from China would be a major mistake, doing nothing to ease inflationary pressures on American consumers and rewarding a human-rights-abusing, communist government for years of cheating American workers and stealing jobs."
Former President Barack Obama's treasury secretary Larry Summers and former Council of Economic Advisers chair Jason Furman have encouraged a different method.
According to Furman “Removing the China tariffs is the single-largest policy lever to bring down inflation that President Biden has."
