Biden Weighs Ending Some China Tariffs Soon https://www.wsj.com/articles/biden-weighs-ending-some-china-tariffs-soon-in-response-to-inflation-11655233761
WASHINGTON—President Biden is closing in on a decision to lift some tariffs on Chinese imports, as he looks for ways to address record inflation and grapples with pressure from labor unions to keep the sanctions in place.
Mr. Biden is expected to make a final decision in the coming weeks on whether to extend the levies imposed by former President Donald Trump, according to administration officials.
White House press secretary Karine Jean-Pierre said Tuesday that no decision has been made, but also bashed some of the levies as ill-considered.
“We have said from the beginning, some Trump tariffs were irresponsible, and did not advance our economic or national security and instead raise costs for families and businesses,” she told reporters traveling with the president.
Administration officials including Treasury Secretary Janet Yellen have expressed openness toward easing the tariffs. Ms. Yellen told a House committee last week that the administration was considering reconfiguring tariffs to ease inflation, since the levies are paid by U.S. businesses and consumers.
The Trump administration invoked Section 301 of the Trade Act to impose about $360 billion in annual tariffs on Chinese imports over four separate actions in 2018-19.
The Biden administration is now reviewing whether the tariffs should be continued. A decision isn’t expected until after a comment period on the first tranche of tariffs—25% levies on $34 billion of Chinese goods imposed on July 6, 2018—ends July 5, an administration official said.
The review has triggered debate within the White House as well as between business and labor groups. The levies were aimed at stopping what the U.S. called unfair trade practices by China, but the tariffs are paid by American businesses and consumers who buy Chinese goods.
“With inflation at a 40-year high, the time for the administration to act on tariffs is now,” said Myron Brilliant, executive vice president and head of international affairs at the U.S. Chamber of Commerce. “The 301 Tariffs hurt American families paying higher prices for every day goods and small businesses that need to import product to meet consumer demand.”
He said he expects Mr. Biden to sign off on some tariff relief but is concerned it may fall short. “We just don’t know if it will be bold enough to make a difference. We certainly hope so.”
Labor unionshave opposed lifting the tariffs. In a filing this month with the U.S. Trade Representative’s office, a committee representing many of the country’s largest labor unions urged the Biden administration to maintain the tariffs.
“Nothing has changed that would merit unilaterally lifting the tariffs; If anything, President Xi and the CCP have only doubled down on their strategy and approach,” the Labor Advisory Committee for Trade Negotiations and Trade Policy said, pointing to China’s alleged theft of intellectual property and other policies it said have “had a corrosive, continuing, and substantial impact on domestic industry and its workforce.”
Mr. Biden has courted labor unions and he has described himself as the most pro-union president in U.S. history.
He didn’t address the issue in a speech Tuesday before the AFL-CIO convention in Philadelphia, though he underscored the need to address inflation broadly.
“It’s sapping the strength of a lot of families,” he said.
Aside from labor pressure, there are other political considerations, with Republicans eager to paint Democrats as weak on China if Mr. Biden lifts the tariffs. The president would likely frame the decision as a way to help consumers grappling with inflation, which he has said is his priority, although analysts have said the impact would be limited.
The administration has long indicated it didn’t feel Mr. Trump’s trade war with China was well executed and said any tariffs need to be better targeted.
During his recent trip to Japan, Mr. Biden said he was considering easing the tariffs. “We did not impose any of those tariffs. They were imposed by the last administration,” he said.
But while the administration has made some modest exclusions, the overall policy has been slow forming, reflecting disagreements over what to do. Trade Representative Katherine Tai recently said that U.S. efforts to reduce inflation shouldn’t come at the expense of long-range policy goals over Chinese trade practices.
China has called on the U.S. to lift the tariffs. While Chinese officials have also criticized the Biden China policy for being confrontational, the tariff debate comes amid signs that both sides are looking to keep relations from deteriorating further.
Over the past week, Defense Secretary Lloyd Austin held talks with Chinese Defense Minister Wei Fenghe in Singapore, while separately national security adviser Jake Sullivan met with his Chinese counterpart, Yang Jiechi, in Luxembourg.
The discussions, which in the Sullivan-Yang meeting lasted for 4.5 hours, covered a range of tensions from human rights, Taiwan, the China-Russia entente and the war in Ukraine and Chinese economic coercion against U.S. allies.
Following the meetings, both sides sought to highlight the need to keep talking.
“Both sides agree that it is necessary and beneficial to keep communication channels unimpeded,” the Chinese Foreign Ministry’s readout of the Sullivan-Yang meeting said. Similarly, a senior Biden administration official described the meeting as part of efforts to maintain lines of communication.
High-level contacts, once frequent, have fallen to a low ebb over the past two years, partly due to the Covid-19 pandemic and partly to harder-line policies pursued in both capitals, according to U.S. and Chinese officials. Little progress, they said, is being made on issues that the U.S. identified as potential points of cooperation, among them climate change and the fentanyl crisis in the U.S.
On North Korea, once an area of cooperation, China joined Russia last month in casting vetoes at the U.N. Security Council to tighten sanctions on Pyongyang for recent missile tests that the U.S. says are destabilizing and violate previous U.N. resolutions.
The U.S. and Chinese officials said chances for a U.S.-China rapprochement may come toward the end of this year. U.S.-China relations are a hot-button issue in both capitals.
After the U.S. midterm elections and a Communist Party conclave that is expected to give Chinese leader Xi Jinping a third five-year term in power, both he and Mr. Biden are likely to feel less political pressure and so may be able to mend ties, the officials and foreign-affairs specialists said.
Charles Hutzler and Anthony DeBarros contributed to this article.
Write to Alex Leary at firstname.lastname@example.org and Andrew Restuccia at email@example.com