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 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.
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.
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.
“It really didn’t do much to the Chinese,” notes Scott Lincicome, analyst at the Cato Libertarian Institute.
âOverall, these tariffs fall almost 100% on American consumers,â added Jennifer Hillman, a former head of commerce under President Bill Clinton who now teaches law at Georgetown University. âThe 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.”