Business groups are aggressively lobbying President Biden to lift tariffs on hundreds of billions of dollars worth of Chinese imports, arguing that this will help ease inflation.
They say eliminating these tariffs will reduce the cost Americans pay for a number of ordinary products, including clothing, sunscreen, soap, furniture, appliances, bicycles and consumer electronics.
Biden officials are divided on the issue, with some disputing the idea that easing tariffs would have a significant impact on inflation, and unions with close ties to the president urging the White House to keep tariffs.
However, business lobbyists say that right now is their best chance to persuade Biden to reduce or even abolish Chinese tariffs first imposed by the Trump administration in 2018 and 2019.
“All options must be on the table to help tackle inflation, and this is the quickest and easiest we can do right now,” said Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation.
“This is not a cure-all, but it will certainly help many companies and consumers if we can reduce the price of some of these goods, especially some of the needs that have jumped due to tariffs.
Biden said he would do whatever it takes to fight inflation, including a possible revision of Trump-era tariffs. Commerce Secretary Gina Raimondo said in a television interview with CNN on Sunday that Biden had instructed his team to analyze whether the abolition of certain tariffs could cool consumer prices.
“I will say it depends on what we are talking about and what types of products,” Raimondo said, noting that tariffs on Chinese steel and aluminum will remain in place to protect American companies. “There are other products, household goods, bicycles, etc. and it may make sense. And I know the president is looking at it. ”
Raising tariffs, which apply to about $ 335 billion in Chinese goods, will boost the end result for some of the world’s largest retailers, manufacturers, technology giants and other US companies that pay tariffs of up to 25 percent on imports of affected goods from China. China.
Corporate lobby groups focus their messages on spending that is passed on to consumers, often citing a Congressional Budget Office study that Section 301 tariffs cost the average U.S. household more than $ 1,200 in real income in 2020 and increase consumer prices by 0.5 percent.
“These taxes are not only highly regressive, hitting lower-income Americans hardest on their basic needs, but they can be eliminated with a single stroke of the pen,” said Steve Lamar, president of the American Clothing Association. shoes.
Business groups also cite a study by the Peterson Institute for International Economics on Free Trade, which found that reducing tariffs on all imported goods could ease inflation by 1.3 percent. The same study found that eliminating tariffs on Chinese imports alone would reduce inflation by only less than 0.3% in the short term, but the overall impact could reach 1% in the long term.
“Tariffs absolutely contribute to today’s high cost of living,” said John Murphy, senior vice president of international policy at the US Chamber of Commerce. “They are taxes paid by Americans and most of them have no strategic justification.
The White House is frantically looking for ways to slow 40-year inflation, which has risen 8.3 percent in the last 12 months ending in April due to supply shocks stemming from a pandemic slowdown.
But U.S. Trade Representative Catherine Ty questioned the effectiveness of easing anti-inflation tariffs, calling the Peterson Institute’s study “something between fiction and an interesting academic exercise” last month.
Thai, who does not want to lose influence in trade talks with China by raising tariffs, turned away from other Biden officials, including Finance Minister Janet Yellen, who said last month that some Chinese tariffs “do more harm to consumers and business ”
“If we are going to address a problem like inflation and given the seriousness it requires, then our approach to instruments to mitigate and tackle that inflation must respect that this is a more complex issue than just border tariffs,” Ty said. during a Washington International Trade Association event on Monday.
Trade unions with close ties to Biden are another obstacle to tariff changes. Several unions commented at the Thai office on Monday, calling for an extension of Chinese tariffs, citing job losses in the United States due to Chinese government trade practices.
“Nothing has changed that would deserve a unilateral abolition of tariffs,” wrote United Steelworkers President Thomas Conway on behalf of the Labor Advisory Committee on Trade Negotiations and Trade Policy, a coalition of unions advising the executive on trade issues. “If nothing else, His President and [Chinese Communist Party] they have redoubled their strategy and approach. ”
Conway noted in the letter that the members of the advisory committee, which includes the International Brotherhood of Crews, the International Union of United Automobile Workers and Service Workers, are “united in the view” that Chinese tariffs should be extended.
Tai is accepting comments from corporations and other affected countries as part of a four-year review of Chinese tariffs that will be completed in the coming months.
Business groups hope Biden’s decision Monday to lift tariffs on imports of solar panels from Southeast Asia is a signal that the White House agrees that tariffs could hurt key industries.
Corporate lobbyists are pushing for widespread cuts or tariff increases in China, but will come to terms with a measure that would make it easier for US companies to get rid of tariffs as a consolation prize.
“The expiration of critical exemptions granted to protect the competitiveness of local production has increased the cost of investment, making US-made products more expensive than foreign competitors, harming producers and workers in the United States,” the National Association said. of manufacturers in a recent publication. letter to congressional leaders.