Sunday, August 7, 2022

Biden may soon remove tariffs on China to tackle inflation: Report

President Biden is set to roll back tariffs on some Chinese imports in an effort to slow rising rates of inflation not seen in the country for decades.

Biden’s decision could be announced as early as this week, according to The Wall Street Journal.

The Biden administration is conducting a mandatory review of tariffs on Chinese imports previously imposed by former President Donald Trump, who argued that unfair trade practices need to punish China.

The Journal reported that US businesses and labor unions favor keeping the tariffs in place, offering comment until Tuesday before the administration announces a final decision.

The outlet said Biden has repeatedly postponed plans to cut tariffs because of policy disagreements between his own senior aides and cabinet secretaries.

Treasury Secretary Janet Yellen and Commerce Secretary Gina Raimondo are reportedly in favor of reducing tariffs because they see them as ineffective in addressing perceived trade practices by Beijing.

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China has long demanded that the US remove the tariffs imposed by the Trump administration.
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But others in the administration, including US Trade Representative Catherine Tai and National Security Adviser Jake Sullivan, favor keeping the tariffs as a tool to gain leverage on China.

Sullivan and Tai want to lift the tariffs only on condition that China address US complaints that unfair trade practices have harmed US companies.

Biden expects the tariff lifting to reduce the cost of consumer goods, which have risen sharply last year due to record levels of inflation.

In May, the consumer price index stayed at an all-time high clip of 8.6% – the highest since 1981 – thanks to rising oil prices as well as rising costs of food, rent and health care.

Officials in the Biden administration are divided over the question of whether to lift tariffs on China.
Officials in the Biden administration are divided over the question of whether to lift tariffs on China.
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The 8.6% year-over-year figure is higher than the 8.3% that was predicted by analysts — and higher than the 8.3% posted in April, when it dropped from 8.5% in March.

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The personal consumption expenditure price index, the Fed’s preferred gauge for inflation, rose 6.3% in May, according to data released Thursday by the Commerce Department.

The readings showed that inflation remains a constant threat to the economy, although it is showing signs of leveling off after a month-long surge.

Some economists doubt that lifting tariffs will go a long way in curbing inflation.
Some economists doubt that lifting tariffs will go a long way in curbing inflation.
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Economists suspect that lifting tariffs, one of the few tools the administration has in place to fight inflation, will have a substantial impact.

China has demanded that Washington reduce tariffs on its imports.

Chinese Foreign Ministry spokesman Wang Wenbin said, “With high inflation rates around the world, the US needs to lift all additional tariffs imposed on China, as it will serve the interests of businesses and consumers and both at large.” will benefit countries and the world.” told reporters on June 15.

Nation World News Desk
Nation World News Deskhttps://nationworldnews.com
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