President Biden said on Monday, May 23, he would discuss China tariffs with Treasury Secretary Janet Yellen on his return to the US. He also mentioned the tariffs weren’t imposed by him, but rather inherited from his predecessor.
On May 18, U.S. Treasury Secretary Janet Yellen signaled that she supported certain tariffs being lifted. She said tariff cuts are “worth considering” for their “desirable effects” on battling high consumer costs. She also thinks not all the tariffs are beneficial for the country under rising inflation.
Amid the Biden administration’s intention to cut some of the tariffs, Trade Representative Katherine Tai said in an interview on Tuesday that the U.S. must be “strategic” when coming to the decision. Yellen focused on the additional cost to consumers of tariffs, while Tai emphasized the impact tariffs can have on the negotiating table. Tai pointed out that in terms of how to meet short-term economic needs, all options have been put on the table. But it is still necessary to focus on the medium and long-term needs of the United States to readjust this economic and trade relationship.
Some economists said that lifting tariffs on imported goods from China will have a positive effect on China’s exports. However, amid current China zero-Covid control that caused supply chain disruption and factory shutdowns that have severely curbed China’s exports, benefits from the removal of tariffs might not be as expected. Some said reducing tariffs now would be a mistake because of timing and because cutting them does not simply return things to the way they were before the duties were imposed.
The offshore yuan jumped as much as 0.7 percent in reaction to Biden’s comments and reached the strongest level since May 5.