July 5, 2022

Biden Weighs Tariff Rollback to Ease Inflation, Even a Little Bit

Domestic trade groups, labor leaders and populist Democrats like Representative Tim Ryan of Ohio, who is locked in a competitive Senate race, have pushed Mr. Biden to keep the tariffs. Mr. Ryan held a news conference on Tuesday urging Mr. Biden not to yield any economic ground to Beijing.

Economists disagree on how much inflation relief the administration could get by removing the tariffs.

In part that’s because the inflation calculations cited by Mr. Summers and others include a far broader relaxation of policies than what Mr. Biden is actually considering, including popular “Buy America” programs that require the federal government and certain contractors to buy American-made goods, even if they are more expensive.

The Peterson Institute study is “something between fiction or an interesting academic exercise” that does not capture the real pain Americans are feeling, the United States trade representative, Katherine Tai, said in an interview last month.

Kim Glas, the president of the National Council of Textile Organizations, which has lobbied the administration to keep the tariffs, said that in her industry the tariffs amounted to “pennies on the dollar” for Chinese goods that were already priced far below alternatives from other countries.

Tariff prices are applied to the price of the good coming in at the border, not to the final retail price charged at a store. For a pair of jeans from China, that import price was $4.28 in the first two months of 2022, meaning the 7.5 percent tariff added just 32 cents to the consumer’s cost, Ms. Glas said. It was the markup at retail — which can bring jeans to $30, $40 or $100 — that represents the bulk of sticker shock, she added.

Article source: https://www.nytimes.com/2022/06/14/business/economy/biden-china-tariffs-inflation.html

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