‘In closing, we note that the tariffs are not a driver of today’s inflation. Not only do the tariffs predate the current inflation by over three years, but Chinese imports make up only 2 percent of goods included in the Consumer Price Index (CPI) and would not materially reduce inflation.’
That’s how a bipartisan group of nine U.S. senators wrapped up a letter sent Wednesday to President Joe Biden, as they asked him to “substantially maintain” tariffs on Chinese imports that were imposed by his predecessor, Donald Trump.
The senators noted that “much of the inflation we are seeing relates to fuel RB00, -0.91% and food PBJ, -0.03% — sectors that are unrelated to imports from China.”
“Rolling back the tariffs on China would undermine the U.S. position in negotiations, expose many U.S. companies and workers to a sudden flood of imports, and signal to China that waiting out the United States is preferable to changing their non-market behavior or complying with the Phase One Agreement,” they also wrote in their missive, referring to a deal that Trump made with Beijing.
Among the nine senators who signed the letter to Biden were three Democrats — Sherrod Brown of Ohio, Bob Casey of Pennsylvania and Elizabeth Warren of Massachusetts — and six Republicans: Mike Braun of Indiana, Kevin Cramer of North Dakota, Jim Inhofe of Oklahoma, Rob Portman of Ohio, Mitt Romney of Utah and Rick Scott of Florida.
During his recent trip to Asia, Biden said he’s weighing cutting tariffs on Chinese goods, adding that they “were imposed by the last administration, and they’re under consideration.”
The Biden administration has eased some Trump-era tariffs on other countries’ goods, but economists have said more could be done and it would help with high U.S. inflation. Economists have long said that tariffs are a tax on consumers.
One analyst told MarketWatch in February that the White House hopes to “get to fairly widespread tariff rollbacks sometime this year,” but the constraints include not wanting to announce those rollbacks until negotiating for some changes in China’s industrial policies.
U.S. stocks SPX, +0.59% DJIA, +0.28% COMP, +0.99% were on track Friday for big weekly gains, helped in part by Federal Reserve minutes out Wednesday that suggested the American central bank remains open to rethinking its aggressive plans to raise interest rates to tame inflation.