With inflation rising and hurting American consumers, the China lobby now has the perfect cover to undo the tariffs put in place by the Trump Administration that were levied as an effort to bolster domestic labor and manufacturing as well as penalized unfair foreign trade advantages. Now The Biden Administration is weighing a decision to remove some of the tariffs on more than $300 billion in Chinese imports according to people familiar with the deliberations, as his administration desperately tries to curb fast-rising US prices. The only question is why?
Economists have stated that removing tariffs will be inconsequential to reducing inflation on the goods where consumers are facing the bulk of the economic pain, food, and fuel.
British financial giant Barclays said any rollback of tariffs on Chinese goods would be “a drop in the bucket” for lowering the US inflation rate, which climbed an annual 8.6% in May.
The bank estimated the maximum direct effect of a complete end to the duties is a one-time reduction of 0.3 percentage point, given the relatively small share of Chinese imports in the US consumption basket.
Treasury Secretary Janet Yellen also noted in June: “I honestly don’t think tariff policy is a panacea with respect to inflation.”
US Trade Representative Katherine Tai, who last month called the tariffs “a significant piece of leverage,” told senators there’s “a limit to what we can do” to ease inflation through tariff changes.