At the same time, Biden resisted a step that would: Lifting tariffs on Chinese imports would save the average household hundreds of dollars a year. Equally tempting, it would reverse the failed trade war policy of his discredited predecessor, Donald Trump.

But the strategic and political considerations outweigh the attractiveness. Whatever the benefit to shaken consumers, the implications at home and abroad for America’s toughest international relations raise higher stakes than that.

“The reason for doing it or not doing it shouldn’t be inflation,” said Richard Haass, a senior State Department official under President George W. Bush, who now heads the Council on Foreign Relations. “The impact on US-China relations and on domestic politics of US-China relations would be greater than any impact on inflation.”

These powerful cross currents swirled last week when Biden virtually met with Chinese leader Xi Jinping. Ahead of the meeting, a range of business groups issued a public letter calling for relief from Chinese tariffs which they said cost U.S. importers $ 110 billion and the average U.S. household $ 1,300 in 2020.

“These costs, compounded by other inflationary pressures, place a significant burden on U.S. businesses, farmers and families trying to recover from the effects of the pandemic,” wrote the business groups, which ranged from American Soybean Association at the Information Technology Industry Council. .

But White House officials said tariffs were not on the US agenda. After Biden and Xi spoke for more than three hours, and with the White House politically battered by the highest inflation in decades, no policy changes were announced.

Taking office after the violent Jan. 6 insurgency instigated by Trump at the United States Capitol, Biden presented his presidency as an opportunity for the United States to prove that democracies can compete with authoritarian regimes such as China in the 21st. century. On human rights issues in Taiwan to the coronavirus, interactions between the two most powerful nations in the world have grown so much that Biden touted the summit as an attempt to ensure that competition “does not” does not degenerate into conflict “.

Yet he still faces accusations of Republicans’ weakness in Chinese politics, a staple of Trump’s 2020 campaign. Although Haass called the attacks “absurd,” the unilateral tariff lifting would only encourage Republicans to amplify them.

Trump has placed tariffs at the center of his “America First” political message, which exploited grievances of blue-collar workers who accuse the expansion of world trade of destroying American manufacturing jobs and lowering their standard of living. The American Action Forum, which advocates the views of market-oriented Republicans, estimated that Trump’s tariffs and corresponding retaliation from trading partners has currently reached more than $ 400 billion in imports and exports.

And the tariffs fell short of Trump’s goal of reviving American industry. In 2019, before the pandemic wreaked havoc on the economy, the Federal Reserve said the manufacturing sector had actually entered a recession.

But Biden has eased tariffs only on European steel and aluminum so far. The larger Chinese levies on imported consumer goods and intermediate goods that companies use to manufacture finished products remain in place.

Trade experts give Trump credit for taking a tougher line after years in which China thwarted global rules by stealing intellectual property, subsidizing domestic industries, and restricting imports to the detriment of businesses and American workers. He succeeded in pushing Beijing to ease restrictions on US agricultural imports and the activities of US financial companies in China.

Yet the modest effect of Trump’s policies on Chinese exporters failed to capitalize on the fundamental economic reforms he had called for.

Here's what Joe Biden can - and can't - do to fight inflation

“It really didn’t do much to the Chinese,” notes Scott Lincicome, analyst at the Cato Libertarian Institute.

“Overall, these tariffs fall almost 100% on American consumers,” added Jennifer Hillman, a former head of commerce under President Bill Clinton who now teaches law at Georgetown University. “The only question for Biden is, can you get something to take those tariffs off? “

In a speech last month, US Trade Representative Katherine Tai only said that “we would initiate a targeted tariff exclusion process” which could lift some levies in a process that “would best serve our economic interests.” . But she noted that China broke past promises to buy American products and maintained “unfair policies” that subsidized domestic production of steel, semiconductors, and solar power products at the expense. from America.

“I am committed to meeting the many challenges ahead in this bilateral process in order to achieve meaningful results,” promised Tai at the Center for Strategic and International Studies in Washington. “But above all, we must defend – to the end – our economic interests.”

That doesn’t mean Biden can’t find a politically acceptable path to the price reduction benefits of Trump tariff lifting in the months to come. But it will require skillful negotiation for concessions from America’s most formidable competitor.

“Like sanctions or war, (tariffs) are easier to initiate than to remove,” Haass concluded. “That’s why God invented diplomats.”

About The Author

Related Posts