The US is to keep tariffs imposed on Chinese goods by the administration of former US president Donald Trump in place, but would evaluate how to proceed after a thorough review, US Secretary of the Treasury Janet Yellen told CNBC on Thursday.
“For the moment, we have kept the tariffs in place that were put in by the Trump administration ... and we’ll evaluate going forward what we think is appropriate,” Yellen told the cable news network, adding that Washington expected Beijing to adhere to its commitments on trade.
Asked if tariffs worked, Yellen hesitated, then said: “We’ll look at that.”
The White House last month said it would review all national security measures put in place by Trump, including an interim trade deal with Beijing.
The deal eased tensions between the world’s two largest economies after a damaging trade dispute that US experts estimate led to a peak loss of 245,000 US jobs, but most of the tariffs remain in place on both sides.
China pledged to buy US$200 billion in additional US goods and services over two years under the interim deal signed by Trump in January last year, but Beijing fell 42 percent short of its target for last year, a study showed.
US President Joe Biden has vowed to mend fences with US allies, but has toed a hard line on China, warning this week that Beijing would pay a price for its human rights abuses.
“We’re in the process of evaluating what our approach should be toward China, but there are a range of issues where we see unfair practices,” Yellen told CNBC, citing concerns about China’s behavior on trade, forced technology transfers and subsidies to high-technology industries.
“We want to make sure that we do address and hold China to its international obligations in these areas,” she said.
There were also areas where the two countries needed to cooperate, she said, such as working to end the pandemic and combating climate change.
Yellen also said that signs of improvement in the US economy are no reason to scale back the administration’s US$1.9 trillion relief plan because the economy remains in a “deep hole” with many people still hurting.
Yellen said that in addition to the relief plan’s US$1,400 stimulus checks and expanded unemployment benefits, the Biden administration is planning to unveil later this year an infrastructure program also aimed at boosting growth.
“We are digging out of a deep hole,” Yellen said. “Last year was the worst year for economic growth since World War II.”
Yellen rejected arguments made by Republicans that Biden’s proposal is too big following the nearly US$4 trillion in government support approved last year.
She said that even with the support already approved, the country still has 9 million people out of work and another 4 million who have dropped out of the labor force.
She said that the Congressional Budget Office has projected that without the Biden plan, it could take the economy until 2024 to get back to full employment.
With the extra support, that goal could be achieved by next year, she said.
“The costs of doing too little is much higher than the price of doing something big,” Yellen said. “I really think the benefits will far outweigh the costs in the long run.”
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