Lowering Tariffs On Chinese Goods Will Help Curb U.S. Inflation
Experts and trade organization officials said that the removal of tariffs on Chinese goods would ease inflation in the history of the United States. Because US President Joe Biden vowed to suppress consumer prices as a top priority.
Jacob Lu, chairman of the National Committee on U.S.-China Relations, said on Tuesday that tariffs have always been an “ineffective way” to resolve trade disputes between the world’s two largest economies. Adding that now, “inflation is a problem, and continuous rolling tax rebates will actually Reduce inflation in the United States.”
The committee tweeted on Wednesday the news of the former US Treasury Secretary, saying that “the removal of tariffs on commodities during the worst period of the trade war will help ease inflation in the United States.”
The United States is experiencing its highest inflation since November 1990. According to the Consumer Price Index of the US Department of Labor, the inflation rate reached 6.2% in October, compared with 1.2% in October 2020.
The fastest rise in inflation in the past 31 years prompted Biden to say. Inflation has hurt Americans’ wallets, and it is my top priority to reverse this trend. These data have also led to a decline in his public approval rate.
Although some officials in Biden and his cabinet insist that rising energy costs and supply chain issues have led to current price increases. Analysts believe that the large-scale tariffs imposed by the Trump administration remained intact during Biden’s first year in office. Administration played a role.
The U.S.-China Business Council’s main communications pipeline. Gebari, said that the high tariffs on billions of dollars worth of goods from China “definitely” lead to price increases, among other factors.
“At a time when American consumers are upset about rising prices. The removal of these tariffs will put downward pressure on prices,” Barry told China Daily on Wednesday.
According to Barry, Trump’s second batch of tariffs a 10% tariff on goods that are not affect the initial 25% tariff. But these commodities include popular consumer products such as smart phones and certain household appliances.
“Former Treasury Secretary Lu said that tariffs do fuel inflation, but there is no political cover for removing tariffs. In fact, cover is a flawed policy that hurts American consumers, businesses and farmers. ” he said, adding Taxation should be lifted to mitigate these same benefits.
According to a Bloomberg report on November 18, the removal of tariffs on Chinese imports will lower prices. But will allow Biden to be criticized the Republican Party for showing “weakness” toward China.
“This is not a weakness to China,” Barry said. “It’s about strongly supporting American families and workers.”
Erica York, an economist at the Federal Tax Policy Center of the Tax Foundation, said that many factors have led to rising prices in the United States. But most of the burden of tariffs has been passed on to consumers.
York said in an email. “Because tariffs still exist, the burden of tariffs in the form of higher prices is still falling on consumers.”
“The removal of tariffs will be a relatively quick way to provide some relief to American companies and consumers facing higher prices,” she added.
U.S. Trade Representative Katherine Tai (Katherine Tai) said in October that it would initiate Section 301 tariff exclusion procedures for U.S. companies.
York said that the exemption process like “a small bandage on a big wound” While Barry said that if there are no other tariff reductions, tariff exclusions are “absolutely necessary.”
York said: “If the harm of tariffs is enough to exclude a product or company. Then the harm of completely removing tariffs is enough to exclude all products or companies.”
She said that exclusion procedures usually lead to arbitrary decisions that do not make much economic sense. Adding that a better way to provide relief is to eliminate tariffs altogether.
“Policy makers should look for ways to relieve pressure on the supply chain, businesses, and consumers, not only during the holiday shopping season. But also to move forward in the economic recovery-retaining tariffs or doubling tariffs is the wrong prescription for the United States The ills of the economy,” she told China Daily.
Gary Huffbauer, a senior researcher and trade expert at the Peterson Institute for International Economics in Washington. Said that he estimated that the immediate impact of the removal of tariffs would be a sharp drop in CPI.
“The one-time impact eliminated may be 1 percentage point, and it may last for a year or 18 months. ” he said “This will greatly offset the current inflation rate, which is about 6%.”
However, according to Hefbauer, from a political point of view. Biden worried about the allegations of “weakness against China”, which is a more important consideration than anti-inflation benefits.
“I expect the 301 obscure exclusion process will be slow and small. There is not much relief,” he said.
Tariffs “definitely” will increase the cost of Christmas shopping. He said that they passed on completely to intermediate companies and ultimately to consumers. They enable competing domestic companies to raise prices.