President weighs rollback of tariff to ease inflation

Economists: Action unlikely to put big dent in inflation

President Joe Biden is weighing whether to roll back some of the tariffs that former President Donald Trump imposed on Chinese goods, in hopes of mitigating the most rapid price gains in 40 years, according to senior administration officials.

Business groups and some outside economists have been pressuring the administration to relax at least a portion of the taxes on imports, saying it would be a significant step that the president could take to immediately cut costs for consumers.

Yet any action by the administration to lift the tariffs is unlikely to put a large dent in an inflation rate that hit 8.6 percent in May — while the political ramifications could be severe.

An influential study released in March predicted a move to lift tariffs could save households $797 a year, but administration officials say the actual effect would likely be far smaller, in part because there is no chance Biden will roll back all of the federal government’s tariffs and other protectionist trade measures.

Some administration economists privately estimate the tariff reductions that Biden is considering would reduce the overall inflation rate by as little as a quarter of a percentage point. Still, in a sign of how big a political problem inflation has become, officials are weighing at least a partial relaxation anyway.

Any move to tweak the tariffs could carry significant trade-offs. It could encourage companies to keep their supply chains in China, undercutting another White House priority to bring jobs back to America. And it could expose Biden to attacks that he is letting Beijing off the hook at a moment when America’s economic relationship with China has become openly hostile, deepening a wedge issue for the midterm elections and the next presidential race.