US Trade Representative says tariff reduction is key to China

US Trade Representative Katherine Tai said at a Senate hearing on Wednesday that US tariffs on Chinese goods are a major piece of leverage in the US-China trade relationship and that a trade negotiator never walks away from leverage. President Joe Biden and US Treasury Secretary Janet Yellen have spoken out against the idea of lowering tariffs on Chinese goods to help combat the country's most serious inflation challenge in four decades. The remarks made by the US Trade Representative, the most senior trade official in the US government, suggested that a real action of tariff removal may not come easily, which needs to be made in exchange for some concessions from China. The US intends to use lowering tariffs on Chinese goods as a bargaining chip, but China won't be swayed by such acts of political blackmail. The high inflation in the US economy is a problem that has to do with the heavy tariffs imposed on Chinese imports. Tariffs increase costs on products imported from overseas, making them more expensive for domestic businesses and households. The economic point of view of tariffs is that they are the most direct and feasible means of curbing inflation, but the debate within the Biden administration shows that this is more of a political policy choice than an economic policy one. On Wednesday, Tai said there was a limit to what we can do to ease inflation through tariff changes, which contrasted with those of US Treasury Secretary Janet Yellen, who said reducing tariffs could help bring down prices. The longer the tariffs are kept in place, the more the US economy will suffer from high inflation, whether the US discussion of China tariffs is a political ploy or a trial balloon to test China. If the US wants to alleviate its inflationary pressure, it needs to figure out how to reduce political interference in trade policy and avoid politicizing economic and trade issues. China still cares about any change to US tariff policy, but not as much as it used to do. China's economy has coped effectively with the challenges because of the US trade war and the fact that it has shrugged off the effects of the US-launched trade war. Trade with the US increased by almost 30 percent year-on-year, to $755.6 billion, and China's foreign trade exceeded $6 trillion in 2021. It is the US that has swallowed the poison pill of its self-inflicted tariff policy. Since the tariffs came into effect, they have cost US corporations more than $1.7 trillion and increased American household spending by $1,300 each year. The US, not China, has the pressing need to remove the tariffs to help alleviate its domestic economic woes. The possible reduction of tariffs is not a gift to China, but an extremely reluctant choice that US politicians would have to make. The US strategy to contain China has not changed due to the constant US sanctions on Chinese businesses and products. China has seen through their words and acts. The current Chinese economy is trying to boost the post-pandemic recovery, with China not interested in messing around with Washington. The US now needs to turn to China for help when it comes to easing inflationary pressure. The US can't have it both ways in asking China for help while keeping China in stranglehold. The US economy needs Chinese supplies of low-cost products to reduce domestic inflation pressure, but global trade is no easy thing to do. With global prices soaring, Chinese products are under pressure. China-US trade is no longer determined by the US alone.