Biden might ease tariffs on China to fight inflation
President Joe Biden might announce as soon as this week a rollback of some U.S. tariffs on Chinese consumer goods — as well as a new probe into industrial subsidies that could lead to more duties in strategic areas, such as technology.
Biden has not yet made a final decision, and the timing could slip, according to people who were familiar with the deliberations and asked not to be identified without permission to discuss private conversations.
It would mark his first major policy step on trade ties between the world’s two biggest economic powers. The president in recent weeks talked with senior economic advisers in meetings where options for a decision on the Trump-era tariffs were discussed, according to the people.
Hints that the Biden administration is considering easing some of the tariffs on $300 billion in Chinese imports have multiplied as inflation has accelerated, putting pressure on U.S. officials to find ways to tamp down prices paid by consumers for everyday merchandise.
Biden said last month he’ll be talking to Chinese President Xi Jinping “soon” and told reporters he was “in the process” of making up his mind about whether to lift tariffs.
Some members of Biden’s Cabinet suggested he use the upcoming call with Xi to ask him for reciprocal tariff cuts on American goods currently facing import duties, though that idea was quickly shot down, the people said.
A White House spokeswoman said no decision on the tariffs has been made but the administration wants to ensure it is aligned with “economic and strategic” priorities and to avoid raising costs for Americans.
The Wall Street Journal previously reported a decision could come this week.
The Biden administration said in May it was taking the first step toward a review of the tariffs, a process required to keep them from starting to expire in July. Industries that have benefited from duties imposed under then-President Donald Trump have until Wednesday to comment and request an extension of the levies.
U.S. Treasury Secretary Janet Yellen said June 8 that the administration is looking to “reconfigure” Trump-era tariffs that were imposed on Chinese goods under what’s known as Section 301 of the
Trade Act of 1974 but “really weren’t designed to serve our strategic interests.”
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 of the 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 that “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 U.S. 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 mid-term 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.