Yellen says some China tariff cuts may be warranted, not inflation ‘panacea’
2022.06.08 22:11
U.S. Treasury Secretary Janet Yellen testifies during a House Ways and Means Committee hearing on President Biden’s proposed 2023 U.S. budget, on Capitol Hill in Washington, U.S., June 8, 2022. REUTERS/Jonathan Ernst
By David Lawder
WASHINGTON (Reuters) – U.S. Treasury Secretary Janet Yellen said on Wednesday the Biden administration was looking to “reconfigure” tariffs on Chinese imports but warned that such cuts would not be a “panacea” for easing high inflation.
Yellen told a U.S. House of Representatives Ways and Means Committee hearing that the Biden administration was examining changes to the “Section 301” tariffs on Chinese goods and to the process for product-specific exclusions from those duties.
She said more information on the tariff plans would be available in coming weeks, adding that changes were “under active consideration.”
The Trump-era tariffs of up to 25% cover hundreds of billions of dollars worth of Chinese imports, including many consumer goods from bicycles to Bluetooth devices and apparel.
“I believe some of the tariffs…really ended up being paid by Americans, not by the Chinese, hurt American consumers and businesses,” Yellen said, adding that the administrtion was looking to “reconfigure those tariffs in a way that would be more strategic.”
Her comments indicate that an internal Biden administration debate over the disposition of the tariffs is still active.
Yellen has been at odds with U.S. Trade Representative Katherine Tai, who has argued that the tariffs’ future should be considered as part of a new strategy to push Beijing to curb its non-market trade and economic practices..
Tai said on Monday that curbing inflation was a more complicated issue than could be achieved by cutting tariffs.
Yellen said that while some tariff cuts may be warranted and could help bring down some consumer prices, it would have a limited affect on high overall inflation rates of about 8% on an annual basis, which she repeated was “unacceptable.”
“I want to make clear I honestly don’t think tariff policy is a panacea with respect to inflation,” Yellen said in response to a question on tariffs. “Goods account for only a third of consumption and it’s not clear exactly what the incidence and pass through would be” from tariff cuts to consumers.
Representative Stephanie Murphy, a Florida Democrat, earlier on Wednesday introduced legislation that would direct Treasury to lead a study of the inflationary effects on tariffs, including the duties on Chinese goods, and on steel, aluminum, solar panels, washing machines and other goods.
