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US Reassessing Trump-Era China Tariffs As Inflation Bites

The review is also looking at China’s behaviour in global markets, the impact of tariffs on wages, job opportunities and America’s competitive edge, but inflation may be a factor for midterm polls.


White House Press Secretary Jen Psaki
White House Press Secretary Jen Psaki said she had no news on tariff reductions as US Trade Representative Katherine Tai is reviewing Trump-era tariffs on Chinese goods. But she made clear that higher inflation was a factor in the deliberations. Photo: Reuters.

 

The US is studying the inflationary impact of tariffs imposed on Chinese goods by former President Donald Trump’s administration in the wake of soaring consumer prices, White House press secretary Jen Psaki said on Monday.

US Trade Representative Katherine Tai is reviewing tariffs imposed by Trump, and while higher inflation is a factor in that review, larger issues are also being assessed, Psaki said.

The review was looking at China’s behaviour in global markets and the impact of tariffs on wages, job opportunities and America’s competitive edge.

“This is an ongoing process, and we’re certainly looking at where we see costs being raised and, at a time where we’re seeing heightened inflation, certainly that’s on our minds,” Psaki said.

 

Compounded Expectations

The White House comments came days after US Treasury Secretary Janet Yellen said it was “worth considering” taking steps to lower US tariffs on Chinese goods given the “desirable effects” such a move could have on lowering US inflation, which has hit 40-year highs this year.

Deputy national security adviser Daleep Singh told a separate event on Thursday that easing tariffs on non-strategic Chinese goods such as bicycles or apparel could help combat inflation.

Biden’s approval ratings have fallen as the costs of energy, food and other staples have risen, with mounting public frustration threatening to cost Democrats their slim majorities in Congress in midterm elections in November.

Chad Bown, a senior fellow at the Peterson Institute for International Economics, said Psaki’s comments compounded expectations that the Biden administration was considering tariff reductions.

Bown said that would likely require behind-the-scenes negotiations with Beijing. Such a move would also likely cause tensions with a Biden administration push to move supply chains from China and closer to home.

There was no immediate comment available from Tai’s office.

 

  • Reuters with additional editing by Jim Pollard

 

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Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years and has a family in Bangkok.

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