President Biden is facing public pressure from leading US unions on an issue that has divided his top advisers: extending former President Trump’s Chinese tariffs on Chinese goods worth about $ 300 billion.
Why it matters: The Biden administration is embroiled in an intense internal debate over whether to abandon some of the so-called Section 301 tariffs to help ease inflation, a key issue that worries Biden’s presidency.
- With an official comment at the office of the US Trade Representative on Monday night, union leaders have made public what they have said in private: they expect Biden to keep all of Trump’s tariffs in place.
- “Our government must act in the national interest to strengthen our economy for the future,” wrote Thomas Conway, president of United Steel Workers, in a commentary on behalf of the Labor Advisory Committee on Trade Negotiations and Trade Policy.
Background: Biden, who values his relationship with organized labor, has made an effort not to burden trade union leaders and is deeply reluctant to transfer them.
- But the confusion with Trump’s tariffs is one of the few rallies the president has that could have little effect on inflation, which is currently 8.3 percent, and is clearly scaring Democrats who are turning to interim terms.
News: Trade Minister Gina Raimondo said on Sunday that “it may make sense” to remove some of Trump’s Chinese tariffs, and mentioned specific products – such as bicycles – that could be released.
- “I know the president is looking at it,” she told CNN’s The State of the Union.
- Raimondo is joined by other Biden officials, such as Treasury Secretary Janet Yellen, in an argument behind the scenes that cutting some tariffs could ease the pain of Americans fed up with high prices.
- On the other hand, there are officials such as US Trade Representative Catherine Tay, who argues that the United States should take a more strategic approach to tariffs – both to protect American workers and to maintain influence over China.
- Fighting inflation should not be reduced to a “single focus” on Chinese tariffs, Tai said Monday, arguing for a “careful, deliberate, strategic” approach to US-China trade relations.
The big picture: With record high gas prices reminding Americans every day that inflation is rising, the White House is looking for ways to show voters it is serious about cutting costs.
- There is no political debate that this is having a negative effect – only 28% of Americans approve of tackling Biden’s inflation, according to a recent ABC News / Ipsos survey.
- Biden has repeatedly said in recent weeks that fighting inflation is his “top priority,” but officials know they have limited tools to reduce it quickly.
- Senior officials suspect that the abolition of Trump’s tariffs will have only a minor effect on the overall inflation rate, about 0.26%, according to a study.
- Biden has released oil from the Strategic Oil Reserve to cut gas prices and plans to visit Saudi Arabia soon, which has just announced plans to increase oil production.
- Some Democrats are clinging to hopes that Senator Joe Manchin (DW.Va.) can agree to a climate and energy package that will also force the pharmaceutical industry to negotiate directly with Medicare, lowering consumer prices.
Between the lines: The Labor Advisory Committee wants to boost local production and manufacturing, but it also needs America’s business community to take more seriously the potential threats from the Chinese Communist Party.
- “Too many US companies have failed to take the necessary action to address the threat posed by CCP policies,” Conway said in an official statement.
- “Many continue to outsource production and research and development, undermining US competitiveness and national security interests.
The bottom line: White House officials – and Biden himself – are always careful to emphasize that fighting inflation is primarily the responsibility of the Federal Reserve.
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