U.S. President Joe Biden is considering announcing a federal gas tax holiday and limiting some tariffs on imported Chinese goods to help Americans deal with the rising cost of consumer goods, Finance Minister Janet Yellen said Sunday.
“President Biden wants to do anything he possibly can to help consumers,” Yellen told ABC’s “This Week” program. “Gas prices have risen a lot and this clearly burdens households.”
US gasoline prices are at a record high of about $ 5 per gallon (3.8 liters), more than 48% more than a year ago. She said eliminating the 18.4-cent-per-liter federal gas tax for a time “is an idea definitely worth considering” and that Biden was willing to work with Congress to implement it.
Biden last week called on major oil refinery companies to take “immediate steps” to increase supply, and in a new letter told them that “historically high” profit margins are unacceptable as prices at gas station pumps continue to rise for Americans.
Mike Sommers, chief executive of the American Petroleum Institute, dismissed Biden’s complaint, saying, “The administration’s wrong policy agenda moving away from domestic oil and natural gas has exacerbated inflationary pressures and discouraged companies’ daily efforts to meet growing energy needs. while reducing emissions. ”
‘Unconsciously caught’
Yellen, on ABC, said: “What happened is that production decreased. Refinery capacity has declined in the United States and oil production has declined. I think producers are partly unknowingly caught up in the power of recovery in the economy. High prices should persuade them to increase supply. ”
But she calls the higher prices “a medium-term issue,” and stresses the need to continue moving to renewable energy sources.
Food prices, monthly rent payments, airline fares, housing and other costs of daily living in the United States rose sharply, by 8.6% in May compared to a year ago, the fastest increase in 40 years.
Analysts point to a variety of causes for inflation: strong consumer demand, Russia’s invasion of Ukraine, global supply chain disruptions, and significant government payments to most U.S. consumers who pocketed extra cash when the coronavirus pandemic swept the country.
Yellen said Biden was also reviewing tariff policy with China because some tariffs imposed by former President Donald Trump’s previous administration “serve no strategic purpose and increase costs for consumers.”
“Inflation is really unacceptably high,” Yellen said. Part of the reason, she said, is that Russia’s war against Ukraine has boosted gas and food prices.
She said U.S. consumers could not expect immediate relief, but “over time I would certainly expect inflation to fall.”
Yellen said she expects the US economy, the world’s largest, to slow down in the coming months, but added: “I do not think a recession [two successive three-month periods of declining growth] is inevitable at all. ”
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