Biden set to meet with advisers to discuss cutting China tariffs

US President Joe Biden has been weighing a decision to remove some of the tariffs on more than US$300 billion (S$420 billion) in Chinese imports. PHOTO: AFP

WASHINGTON (BLOOMBERG) - US President Joe Biden will discuss possible reductions in US tariffs on Chinese goods in a meeting with his advisers set for Friday (July 8), according to people familiar with the matter, as his administration nears a closely-watched decision on trade with China.

The White House meeting is the latest in a series that Mr Biden has held on the issue, and it is not clear if he intends to decide on a path forward, according to the people, who spoke on the condition of anonymity because the president has yet to reach a decision.

The White House did not immediately respond to a request for comment on Thursday night.

Mr Biden has been weighing a decision to remove some of the tariffs on more than US$300 billion (S$420 billion) in Chinese imports imposed by his predecessor Donald Trump, according to people familiar with the deliberations, as his administration desperately tries to curb fast-rising US inflation.

Mr Trump used section 301 of the Trade Act of 1974 to hit China with the duties starting in July 2018 after an investigation concluded China stole intellectual property from American companies and forced them to transfer technology.

Last month, US Treasury Secretary Janet Yellen said tariff reductions “could help to bring down the prices of things that people buy that are burdensome”. 

That’s similar to the view held by Commerce Secretary Gina Raimondo, who said removing duties on household goods “may make sense”, but favoured keeping tariffs on steel and aluminum products from China as a way to protect American workers and national security. 

Still, ending tariffs on merchandise like bicycles and clothing will not help Americans where higher prices hurt most – food, fuel and housing. 

Ms Yellen, Ms Raimondo and US Trade Representative Katherine Tai will not attend the Friday meeting.

Barclays Plc said any rollback of tariffs on Chinese goods would be “a drop in the bucket” for lowering the US inflation rate, which climbed an annual 8.6 per cent in May. 

The bank estimated the maximum direct effect of a complete end to the duties is a one-time reduction of 0.3 percentage point, given the relatively small share of Chinese imports in the US consumption basket. 

The Biden administration said in May it was taking the first step toward a review of the tariffs, a process required to keep them from starting to expire in July.

Mr Biden runs the risk of irking unions, a crucial source of support in the approaching midterm elections, as he considers the tariff question.

Unions have opposed any such move, saying the levies help protect factory jobs.

The White House has also been weighing a new investigation into Chinese subsidies and their damage to the American economy as a way to pressure Beijing on trade.

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