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US weighs restructuring Trump-era China tariffs

July 6, 2022

US President Joe Biden's administration remains divided on whether to allow some of the tariffs to expire to ease inflation or renew them to maintain leverage over Beijing.

https://p.dw.com/p/4DimO
A container port in China's Qingdao
Around $10 billion worth of tariffs on Chinese goods are set to expire pending intervention Image: Yu Fangping/Costfoto/picture alliance

US President Joe Biden's administration is looking at whether to cut tariffs on some Chinese imports in a bid to ease inflation, the White House said on Tuesday.

Four years ago, former US President Donald Trump imposed his first wave of tariffs, which in total would end up covering some $350 billion (€357 billion) worth of Chinese imports to the US. 

The administration's review is required to keep the duties from automatically expiring.

One deadline for submitting requests to keep $10 billion in tariffs in place expires Wednesday, while another tranche is set to expire on August 22.

Why is the Biden administration divided on tariffs?

More than 400 requests to maintain the tariffs on Chinese goods had been submitted to the US Trade Representative's office (USTR) as of late Tuesday, which complicates any plan on removing them. Such requests can trigger a review and continuation of the tariffs. 

The deliberations come as USTR is conducting a four-year review of the tariffs.

Among the associations lobbying for the tariffs to be maintained are 24 labor unions. Labor unions are a key constituency for Biden.

White House Press Secretary Karine Jean-Pierre said Biden's team was still weighing various strategies and that no decision had been made yet.

"There are a lot of different elements to this, especially since the previous administration imposed these tariffs in such a haphazard, nonstrategic way," Jean-Pierre said.

"We want to make sure that we have the right approach," she added.

Biden administration sees China as 'a threat'

Meanwhile, US Trade Representative Katherine Tai said she is reluctant to give up the leverage provided by the duties.

However, US Treasury Secretary Janet Yellen has contended that some of the tariffs "serve no strategic purpose."

Yellen has also argued that reconfiguring tariffs could somewhat ease inflation, which has reached a 40-year high. 

The tariffs are aimed at industrial production such as microchips and chemicals, as well as consumer merchandise.

Trump imposed tariffs on imports from China, claiming retaliation for Beijing's alleged theft of American intellectual property and forced transfer of technology.

Talks between the US and China

The tariffs were discussed by Secretary Yellen and Chinese Vice Premier Liu He in a call on Monday night.

Yellen also raised the issue of what she called Beijing's "unfair" trade practices in the call with He, according to the US Treasury.

China's Commerce Ministry said that Beijing "expressed its concern over issues such as the removal of additional tariffs and sanctions imposed by the US on China and fair treatment of Chinese companies."

US Secretary of State Antony Blinken is set to meet with Chinese Foreign Minister Wang Yi at the G20 conference this week in Bali, with trade likely high on the agenda. 

sdi/wmr (AP, AFP, Reuters)