President Biden said the White House is considering dropping tariffs on China as a way to lower inflation.
The White House is reviewing tariffs imposed under former President Donald Trump which raised prices on a wide range of goods, from diapers to clothing, furniture, and solar panels. The duties included $360 billion on Chinese imports. That prompted China to add tariffs on some U.S. agricultural products.
"President Biden knows that inflation is among Americans' top concerns right now, but unfortunately, he and his administration can do very little to temper it. Eliminating tariffs on Chinese imports and releasing oil from the strategic petroleum reserves are more symbolic gestures rather than long-term solutions to reduce consumer prices. The cure for high prices is high prices, and eventually consumers and businesses will be forced to cut their spending," stated Caleb Silver, Investopedia's editor-in-chief.
President Biden had campaigned against the tariffs, calling them a tax on the middle class. Last week, the Biden administration notified about 600 representatives of U.S. industries that have benefited from the China tariffs that they will begin to expire in July. The White House invited the businesses to request the government to keep the tariffs in place.
A recent study by the Peterson Institute found that cutting the tariffs could potentially reduce the U.S. CPI by 1.3 percentage points.
The Biden administration will continue its review, and is expected to make a decision on the tariffs in coming weeks.