Biden considers removal of Trump-era China tariffs to ease inflation
But US administration split on loss of leverage, according to reports
US president Joe Biden is debating whether to end or cut Trump-era tariffs imposed on Chinese imports into the United States, according to reports.
Introduced in 2018 during the Trump administration, tariffs on more than $300 billion in imports from China — including products and components vital in consumer and business technologies — were inherited by the Biden administration.
According to Bloomberg, president Biden and his cabinet have discussed the inflationary impact of these levies with Treasury Secretary Janet Yellen. The cabinet was looking at all of the possible ways to curb inflation and to provide some relief on cost of living for Americans, the report said.
However, industry leaders remain sceptical about whether a cut to tariffs would have a significant impact on US consumer inflation — recently hitting a 40-year record — in the near term.
According to the Financial Times, Biden's cabinet is split over a politically fraught issue that could influence the November congressional midterm elections.
Although he began his term suggesting he was in no rush to remove the tariffs which were built up during the trade war with Beijing, the White House was debating whether lifting some tariffs would help provide some relief to US consumers.
But the UK's pink business daily paper said deep divisions remain in the administration. On one side, Yellen backed removing tariffs to help calm inflation. But US trade representative Katherine Tai worried that in reducing tariffs, the US would lose its leverage over China in future negotiations.
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In March, the US government said it would lift import tariffs on one specific category: graphics cards. On the back of the move, manufacturer Asus promised the prices of some of its graphics cards would decline by up to 25 percent. The company cut prices on Nvidia's GeForce RTX 30-series graphic cards from April 1, including the RTX 3050, 3060, 3070, and high-end 3080 and RTX 3090 cards.
In 2019, officials in China announced a preliminary agreement on phase one of negotiations with the United States. A statement from the US Trade Representative said the deal required China to make structural reforms and changes to intellectual property, technology transfer and financial services. China has also pledged to make sizeable agriculture and services purchases while the US agreed to significant changes to Section 301 tariffs.
The statement at the time concluded: "The United States will be maintaining 25 percent tariffs on approximately $250 billion of Chinese imports, along with 7.5 percent tariffs on approximately $120 billion of Chinese imports." ®