Will the U.S. eliminate tariffs on imports from China?
Recently, U.S. President Joe Biden has stated that his administration is considering eliminating tariffs on imports of goods from China as a measure to contain inflation.
Between 2018 and 2019, during the administration of the former President Donald Trump, tariffs of up to 25% were imposed on imports from China valued at 370 billion dollars, as part of the trade war between the two countries.
According to the Secretary of the Treasury, Janet Yellen, some of these import taxes have no strategic purpose and, despite China's unfair trade practices, they only affect US household spending.
Tariffs are significant leverage: USTR
However, United States Trade Representative (USTR) Katherine Tai, considered that tariffs on Chinese goods are "significant leverage" in the trade relationship with China and their removal would have a limited effect on controlling inflation in the short term.
According to Reuters, Tai's comments indicate that she is pushing President Biden to maintain tariff leverage over China while deciding whether or not to lift some of the Section 301 tariffs.
Tai revealed that it is key for the Biden administration to turn this leverage into a strategic program to strengthen U.S. competitiveness and defend its interests in a global economy in which China will continue to play.
The Trade Representative stated that tariffs and other tools can help improve the United States’. competitive position in the medium and short term.
According to Reuters, Biden is likely to decide on tariff elimination after the G7 leaders' summit next week.
Tai added that inflationary pressures will eventually ease, but the U.S. will still face long-term strategic challenges from China's state-dominated economic policies.
According to Census Bureau’s figures, from January to April, the U.S. imported $179.3 billion from China, with China being the leading source of the country's foreign purchases, which account for 17% of the total.
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Source: Reuters and Census Bureau.
