Washington must be strategic on China tariffs, says trade chief

WASHINGTON • The US must be strategic when it comes to a decision on whether to remove China tariffs, Trade Representative Katherine Tai said yesterday, a day after President Joe Biden mentioned he would review Trump-era levies as consumer prices surge.

"With respect to the tariffs, our approach as with everything in this relationship, is to be strategic," Ms Tai said in an interview with Bloomberg Television. "We have to keep our eye on the ball in terms of how to effectively realign the US-China trade and economic relationship."

Ms Tai would not say whether the administration would remove the tariffs, or give a time frame for making a decision.

"All options are on the table in terms of how we address our short-term economic needs, but our eye must be on the ball with respect to the medium and long term needs for the United States to realign this economic and trade relationship," she said.

Mr Biden said on Monday that he is considering removing some of the tariffs and would talk with Treasury Secretary Janet Yellen about it after returning to the US from Asia.

Chinese Foreign Ministry spokesman Wang Wenbin reiterated his country's stance about the tariffs during a regular press briefing in Beijing, saying: "There's no winner in a trade war."

He added that considering high inflation rates, lifting the tariffs "is in the interests of consumers and businesses. It is in the interests of the US, China and the whole world".

Ms Tai earlier this month said that while relief from US tariffs on China is one option under consideration to confront the fastest inflation in four decades, the duties should be studied in the context of broader economic policy. She dismissed research from the Peterson Institute for International Economics in March, which estimated that eliminating a wide array of tariffs, including those on Chinese goods, could reduce inflation by 1.3 percentage points.

Her comments contrasted with those of Dr Yellen, who last month suggested that the US is open to scaling back the widespread Trump-era tariffs on merchandise imports from China to help provide relief to Americans.

While Dr Yellen has tended to focus more on the cost that tariffs impose on American consumers, Ms Tai has highlighted the leverage that they provide at the negotiating table.

The Biden administration earlier this month also took the first step towards a review of tariffs on more than US$300 billion (S$412 billion) in Chinese imports, which is required to prevent them from automatically expiring in July. Some economists, lawmakers and the US Chamber of Commerce have pressured the administration to reduce or eliminate the tariffs.

BLOOMBERG