US President Joe Biden is considering scrapping tariffs on a range of Chinese goods to curb inflation, but no decision is likely before next week’s G7 summit, people familiar with the matter said.
White House officials on Friday discussed options with Biden for reducing some of former US president Donald Trump’s punitive duties on China, including potentially substantial cuts, three of the sources said.
The scale of any potential final move has not yet been decided, they said.
Photo: AFP
Biden’s advisers are poring over Trump-era tariffs on hundreds of billions of US dollars of Chinese goods — many of which they see lacking strategic value, the sources said.
A White House spokesperson said that the goal was to align the tariffs with US economic and strategic priorities, safeguarding the interests of workers and critical industries, while not “unnecessarily raising costs on Americans.”
After weeks of fierce debate among key aides over the issue, Biden has come to favor swift action on the tariff issue, keen to use any leverage to reduce surging inflation ahead of the Nov. 8 midterm elections for control of the US Congress, two of the sources said.
Biden on Saturday told reporters that he was in the process of making up his mind.
“Conversations on this issue are ongoing and intensifying, but this is not a binary [choice to] lift all tariffs or don’t. It has to make sense strategically,” a senior administration official said.
Margaret Cekuta, a former US trade official who is now a principal with the Capitol Counsel lobbying firm, said easing tariffs would likely have a limited effect on inflation and could take about eight months to become fully effective.
“Economically it doesn’t make sense, but it could help combat the psychological impact of high inflation,” she said, adding that the administration was trying to analyze which tariff lines could have the greatest effect on prices.
One administration proposal calls for eliminating a large chunk of Trump’s punitive tariffs on Chinese consumer exports, except those on US$50 billion of goods tied to an initial so-called Section 301 probe, which focused on circuit boards, semiconductors and other “strategic” goods, one of the sources said.
The proposal also excluded changes to tariffs on steel and aluminum.
However, it could remove tariffs on a large number of consumer goods levied in 2018 and 2019 as Trump’s trade dispute with Beijing escalated — about US$320 billion at the time they were imposed.
These included Internet routers, Bluetooth devices, vacuum cleaners, luggage and vinyl flooring.
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