Reuters reported on Tuesday that President Biden will have to resolve the heated debate among his advisers over whether to cut tariffs as his administration tries to combat high inflation, citing sources familiar with the talks.
While Yellen has advocated removing some of the tariffs, the sources said US Trade Representative Katherine Tai prefers to keep them in order to develop a more strategic trade agenda that protects US jobs and China’s behavior in global markets. . This approach could even include new strategic fees.
Many of the goods subject to punitive tariffs of up to 25% have little to do with the goals of the Trump administration’s Section 301 investigation into China’s misappropriation of technology and intellectual property.
The tariffs on consumer goods, from bicycles to clothing, were imposed after China retaliated against Trump’s initial rounds of tariffs.
Some economists, both inside and outside the administration, along with many business groups, have advocated tariff reductions on China as a way to help control high inflation caused by COVID-19 supply chain disruptions, a strong recovery and spikes in food and energy prices due to Russia’s invasion of Ukraine.
Yellen has said that the rate cuts may help ease inflation, although they probably won’t be a “game changer”. “So I see a case not just for inflation, but because there would be benefits for consumers and businesses to … cut back on some of it. But we’re having these discussions.”
However, he said he respects the views he has heard in the tariff policy debates.
“There are a variety of valid concerns,” he said. “And we haven’t really figured it out yet: come to an agreement on where to be on tariffs.”
