China's Beige Book Chief Economist doesn't think tariff rollback will curb inflation

The Biden Administration wants to tame inflation before the midterms in 2022. Secretary of the Treasury Janet Yellen met with Vice Premier of the People's Republic of China Liu He, one of China's top economic advisors, on Monday to discuss supply chain disruptions, high commodity prices, and the possibility of lifting Trump-era tariffs.

The Chinese Beige Book Chief Economist Derek Scissors doesn't think a tariff rollback will curb inflation.

We have a very narrow proposal that will probably come from the Biden Administration. Scissors told Yahoo Finance Live that it is not going to have any effect on inflation.

Scissors said that the main precursors to inflation — gas, food, lodging — are not imported from China. In May s Consumer Price Index, CPI, released by the U.S. Bureau of Labor Statistics, these goods and services had the highest price hikes.

He also referenced how consumption of the goods affected by the tariff reversal is only a small portion of total consumption in the U.S.

Scissors explained that they are a small part of U.S. consumption. U.S. consumption is 50 times that large. In January 2018 the Trump administration imposed tariffs on China because of the trade war. After the Phase One agreement in January 2022, tariff rates and the percent of trade that were subject to tariffs remained flat and steady. According to Peterson Institute for International Economics PIIE Scissors, 66% of Chinese exports are subject to the U.S. s 19.3% tariff.

That is something that a lot of the business community wants, according to Scissors.

Scissors explains that the U.S. exports soybeans to China, despite the United States Department of Agriculture USDA reports that China accounts for 60 percent of global soybean imports. In 2021, total soybean exports from the U.S. to China were $14.13 billion.

Scissors recommend the U.S. try to strengthen the dollar in order to control inflation.

Scissors said that a stronger dollar reduces the cost of all imports, and that would be a more powerful tool.