Reuters reported on Tuesday that President Biden will have to resolve a simmering debate among his advisers over whether to cut tariffs as his administration tries to combat high inflation, citing sources familiar with the talks.
While Yellen called for some tariffs to be removed, sources said US Trade Representative Catherine Tay would prefer to keep them in order to develop a more strategic trade agenda that protects US jobs and China’s behavior in global markets. This approach can even include new strategic fees.
Many of the goods subject to punitive tariffs of up to 25% have little to do with the Trump administration’s Section 301 investigation goals into China’s misappropriation of technology and intellectual property.
Tariffs on consumer goods, from bicycles to clothing, were imposed after China hit back on Trump’s initial rounds of tariffs.
Some economists, both inside and outside the administration, along with many business groups, have called for lower tariffs on China as a way to help control high inflation caused by COVID-19 supply chain disruptions, robust recovery and spikes in food and energy prices due to the invasion of Russia. for Ukraine.
Yellen said interest rate cuts could help ease inflation, although they likely wouldn’t be a “game-changing factor.” “So I see a case not just for inflation, but because there will be benefits for consumers and businesses … to cut some of it. But we’re having these discussions.”
However, he said he respected the opinions he had heard in tariff policy discussions.
“There are a variety of legitimate concerns,” he said. “And we haven’t found a solution yet: we’ve come to an agreement on where the tariffs will be.”
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