Biden’s Striptease on China Tariffs

The American Prospect

Robert Kuttner

July 8, 2022

President Biden met today with top advisers to discuss whether to cut some of the existing tariffs on exports from China. It’s a spectacularly bad idea, since tariff cuts would not address the drivers of inflation but would remove salutary pressure on Beijing to stop abusing the trading system. The meeting was apparently inconclusive.

Biden told reporters around noon, just before the meeting began, that he had not made any decision yet. As on student debt relief, kicking the can down the road has become a Biden signature, a habit that manages to offend just about everyone, while signaling weak leadership.

All week, the business press has been publishing leaks about possible tariff cuts. Last Monday, The Wall Street Journal ran a piece titled “Biden Might Soon Ease China Tariffs.”

On Tuesday, it was Bloomberg’s turn. The Bloomberg piece added the tidbit that Treasury Secretary Janet Yellen, who had previously called for tariff cuts, had discussed the idea with China’s Vice Premier Liu He in a conference call. In fact, their call was about macroeconomic issues, and it was Liu who had raised the issue of tariffs.

Then Politico reported a possible token cut of $10 billion, out of $370 billion—and added the confounding assertion that the administration is also considering a full-scale investigation of China’s massive export subsidies under Section 301 of the 1974 Trade Act, which could lead to more tariffs. It would make no sense to both do that investigation and cut tariffs now.

Sources for Politico’s story included “three industry officials and former federal officials,” which is to say lobbyists. In short, these leaks come mainly from people pushing for tariff cuts, over the opposition of the labor movement, National Security Adviser Jake Sullivan, and U.S. Trade Representative Katherine Tai.

All this happened in a week when Biden was taking a carefully staged trip to Cleveland to tout union workers and domestic manufacturing. You have to wonder if the Biden administration is so incompetent as to promote U.S. manufacturing and cuts in China tariffs in the same week.

It’s high time for Biden to put this away once and for all—and to say in so many words that there will be no cuts in the China tariffs until there is a total renegotiation of China’s predatory role in the trading system.

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