Biden is ‘leaning toward’ lifting some of the tariffs that Trump slapped on China during trade war after ‘candid’ talks Jake Sullivan had with Chinese counterpart that lasted four and a half hours
- Biden is eyeing up a lift on some Trump-era Chinese tariffs, in a move to tackle red-hot inflation that risks angering the labor movement
- The move also risks making the president appear weak on China, after Nat. Sec. Advisor Jake Sullivan raised concerns about Beijing’s aggression toward Taiwan
- Thus far Biden has left in place most of the Trump-era Section 301 tariffs
- Tariffs on consumer items like bicycles may be on the chopping block but the levies are likely to remain in place for commercial goods like steel and aluminum
Desperate to demonstrate action to drive down 8.6 percent inflation, Biden and his top officials are considering shedding some of the up to 25 percent tariffs that now cover $350 million worth of goods imported from China.
Biden is expected to exempt some products covered by Trump’s SDection 301 tariffs on consumer items like bicycles but is likely to leave in place the tax on commercial items like steel and aluminum, White House sources told Axios.
The report comes after National Security Advisor Jake Sullivan held a 4.5 hour meeting with his Chinese counterpart Yang Jiechi where he reportedly brought up concerns about China’s ‘aggression’ toward Taiwan.
Both Treasury Sec. Janet Yellen and Commerce Sec. Gina Raimondo confirmed last week that Biden may reconfigure the Trump-era tariffs.
While the White House has claimed it is largely up to the Federal Reserve and Congress to take action to tackle inflation, eliminating some tariffs is one of the few tangible executive actions Biden can take in the short term.
National Security Adviser Jake Sullivan met with China’s top diplomat Yang Jiechi in Luxembourg on Monday for four and a half hours, and raised concerns about what an official said was Beijing’s ‘aggressive actions’ towards Taiwan.
Tensions have grown during the past year as China stepped up its rhetoric on Taiwan and increased military flights around the autonomous island
A potential announcement is expected as soon as this month. A White House spokesperson stressed: ‘No decision has been made.’
‘The President is discussing with his team on ensuring that tariffs are aligned with our economic and strategic priorities, such as safeguarding the interests of workers and critical industries, advancing our national security, and not unnecessarily raising costs on Americans.’
‘I believe some of the tariffs…really ended up being paid by Americans, not by the Chinese, hurt American consumers and businesses,’ Yellen said in a House Ways and Means Committee hearing last Wednesday.
Yellen is among the voices within Biden’s administration who want to ease tariffs, putting her at odds with U.S. Trade Representative Katherine Tai who wants to leave them in place until the Biden administration has a broader strategy to protect American jobs and combat unfair Chinese trade practices.
Tai insisted on Monday that inflation is ‘a more complicated issue than just tariffs at the border.’
Yellen stressed that cutting tariffs is not a cure-all to the inflation problem.
‘I want to make clear I honestly don’t think tariff policy is a panacea with respect to inflation,’ Yellen stressed. ‘Goods account for only a third of consumption and it’s not clear exactly what the incidence and pass through would be’ from tariff cuts to consumers.
According to one study, eliminating the tariffs could eventually lead to about a 1 percent reduction in inflation.
And as the Biden administration mulls the tariff cut, labor unions last week filed an official comment with the U.S. Trade Representative to urge Biden to keep them in place.
‘Our government must act in the national interest to strengthen our economy for the future,’ said the letter, signed by Thomas Conway, who chairs the Labor Advisory Committee for Trade Negotiations and Trade Policy, according to Axios.
Biden often flaunts his relationship with labor unions and would be hesitant to cross them.
Meanwhile, retailers have urged Biden to do the opposite and lift tariffs to curb red-hot inflation.
The National Retail Federation last month called on Biden to lift the tariffs in a letter, claiming that doing so could reduce retail prices by 1.3 percent.
Last week Biden paused tariffs on Chinese-made solar panels, a move that Democrats largely applauded as a green energy initiative and conservatives were split on.
Rep. Peter Meijer, R-Mich., told DailyMail.com that Biden should have lifted the solar panel tariffs sooner.
‘For a guy who’s been saying we need to get additional renewables out there and then you have a 26 percent tariff on the front end … that Biden continued to defend the tariff, it’s very much on odds with everything else he was saying.’
The president will declare a 24-month tariff exemption after an investigation froze imports from key foreign suppliers and stalled projects (pictured: panels in California)
Meijer said that it was ‘ironic’ that Biden had left in place so many Trump-era tariffs.
‘I always thought it was a bit ironic just how he has kept on, I think, every single tariff. With those that were intended for short term tactical negotiation purposes, I think it’s important to step back and evaluate. Have they been effective? Have they spurred the domestic manufacturing that they were intended to do or have they just raised cost?’
Sen. Lindsey Graham said he thought Chinese tariffs should be left in place. ‘I think tariffs imposed on China basically levels the field because they cheat.’
‘One reason that Mexico decided to keep illegal immigrants in Mexico until their court date for asylum is that Trump threatened to put tariffs on the products coming out of Mexico and that actually worked because of what he did with China,’ Graham said during a debate with Sen. Bernie Sanders at the Kennedy Institute on Monday.