US Trade Representative Tai says fighting inflation more complicated than cutting China tariffs

USTR Katherine Tai said that it was important to bring a "thoughtful, deliberate, strategic" approach to the US-China trade relationship. PHOTO: REUTERS

WASHINGTON (REUTERS) - US Trade Representative Katherine Tai on Monday (June 6) said fighting inflation is a more complicated issue than can be addressed with a "singular focus" on China tariffs, and that it was important to bring a "thoughtful, deliberate, strategic" approach to the US-China trade relationship.

Tai, in remarks to the Washington International Trade Association, said inflation was "scary" and hurting Americans' pocketbooks but was a complicated issue with many causes.

"The economy is large and there are a lot of pressure points and levers in that economy," Tai said.

"If we're going to take on an issue like inflation, and given the seriousness that it requires, then our approach to tools for mitigating and addressing that inflation need to respect that it is a more complicated issue than just tariffs."

Tai's remarks indicate that a debate within the Biden administration is continuing over whether to cut some US "Section 301" duties on hundreds of billions of dollars of Chinese imports of up to 25 per cent imposed by former President Donald Trump.

Tai said it was important for the Biden administration "to bring a thoughtful, strategic deliberate approach to how we manage this relationship (with Beijing) overall."

Among the administration's most important responsibilities "is to figure out how to get this relationship right and nothing about this relationship is easy," she added.

Tai has been at odds with US Treasury Secretary Janet Yellen over the future of the Section 301 tariffs, with Yellen arguing that they hurt US consumers and businesses and that they could have some effect on reducing prices.

Tai said the Biden administration over the next two weeks would begin defining its vision for another key trade initiative with 13 Asian countries.

Tai added that the Indo-Pacific Economic Framework talks need to be “holistic, extremely flexible, adaptable and really, really pragmatic.”

She said she hopes to have a more formalised convening of participating countries this summer, including at the trade minister level, to discuss the negotiating pillars of labor rights, high environmental standards, digital trade and supply chain resilience. 

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