YouTube: https://youtu.be/GjiOssj-h14
US Treasury Secretary Janet Yellen recently indicated the Biden administration carefully is re-examining its China trade strategy, including tariffs, especially considering today's seemingly run-away inflation that hovers near 8.5%
The tariffs resulted from a 2020 trade war that eventually eased as a 'phase one' trade deal was signed between the US and China. The deal required China significantly increase its purchase of US exports. However, a recent analysis showed China's additional purchase of US goods only insignificantly increased.
Yellen's remarks are the latest signal President Biden’s administration may eventually remove at least some of the tariffs left over from that trade war. Her statement follows that of another White House official who similarly indicated the potential to lift tariffs as a way to address rising inflation.
Lifting US tariffs, however, requires navigating a complicated political playfield.
As US-China relations continue to worsen, both major US political parties see China under current leadership as a threat to US power and global stability. Lawmakers such as these support continuing trade restrictions seeing them as a means to forcefully support domestic manufacturing and production and a tool that must be applied considering restrictions China places on access to its markets. Accordingly, Biden may be wary of opening himself to criticism that he is soft on China.
Alternatively, other lawmakers pressure the Biden administration clearly indicating support for lifting at least some tariffs. They have made clear that they want to see at least some of the tariffs lifted. Assorted business groups join this call to lift tariffs on Chinese goods.
Additionally complicating the matter is the upcoming 2022 midterm elections. While Biden currently does not face reelection, every congressperson is up for re-election in November, as well as 1/3 of the US Senate.
And, of course, these members pay attention to polling numbers. A recently published poll shows many surveyed favor the continued application of Chinese trade restrictions and similar actions to counter China's rising economic power.
