A U.S. tariff shift to China is unlikely for days

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STRATEGY:
Sources said Biden advisers were looking at tariffs to reduce inflation ahead of the midterm elections, but no changes would be likely before the G7 meeting.

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 have said.

On Friday, White House officials discussed with Biden options for reducing some of former US President Donald Trump’s punitive obligations to China, including potentially substantial reductions, three of the sources said.

The scale of any potential final move has yet to be decided, they said.

Photo: AFP

Biden advisers are looking at Trump-era tariffs on hundreds of billions of US dollars worth of Chinese goods — many of which they say lack strategic value, the sources said.

A White House spokesperson said the goal was to align tariffs with U.S. economic and strategic priorities, safeguarding the interests of workers and critical industries, without “unnecessarily increasing costs to Americans”.

After weeks of fierce debate among top aides on the issue, Biden has come to favor quick action on the tariff issue, eager to use any leverage to curb soaring inflation ahead of the midterm elections in November 8 for US Congressional scrutiny, two of the sources said.

Biden told reporters Saturday he was making up his mind.

“Conversations on this issue are ongoing and intensifying, but it’s not binary [choice to] raise all tariffs or not. It has to make strategic sense,” a senior administration official said.

Margaret Cekuta, a former US trade official who is now a director of lobbying firm Capitol Counsel, said the easing of tariffs would likely have a limited effect on inflation and could take around 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 might have the greater effect on prices.

An administration proposal calls for eliminating much of Trump’s punitive tariffs on Chinese consumer product exports, except those on US$50 billion worth of goods tied to a so-called initial article investigation. 301, which dealt with printed circuit boards, semiconductors and other “strategic” goods. , said one of the sources.

The proposal also excluded changes to steel and aluminum tariffs.

However, he could scrap tariffs on a slew of consumer goods levied in 2018 and 2019 as Trump’s trade dispute with Beijing escalated – around $320 billion at the time they were imposed.

These included internet routers, Bluetooth devices, vacuum cleaners, luggage and vinyl flooring.

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