U.S. Commerce Secretary Gina Raimondo said the geopolitical situation had become “extraordinarily complicated” after House Speaker Nancy Pelosi’s visit to Taiwan, making President Biden “cautious about removing tariffs on $300 billion in Chinese goods” “. Another person familiar with the matter said that the incident has caused the Biden administration to reconsider whether to cancel tariffs on China or implement other measures.
“Certainly, it makes things a little bit more challenging,” Raimondo said in an interview with Bloomberg Television on Wednesday. “It’s more difficult, but I hope we can move beyond that and get back to having more discussions. status.”
Treasury Secretary Janet Yellen and Trade Representative Katherine Tai have been divided on the issue for months after the Biden administration assessed the removal of tariffs on China. Raimondo said Biden was “very cautious” not to make a decision that would hurt American workers, but the two only recently discussed the matter again and Biden is expected to make a decision soon.
Citing several anonymous officials, Reuters reported that Biden has not yet decided whether to roll back the tariffs, and the White House is considering a combination of removing some tariffs but launching a “Section 301 investigation” on certain items, along with an expanded list of tariff exemptions to help U.S. companies gain access to tariffs. Some materials only available in China.
Former U.S. President Trump imposed tariffs on more than $300 billion worth of Chinese goods in 2018, affecting a wide range of industrial supplies and consumer products. While it is unclear what categories of tariffs the Biden administration is considering removing, U.S. officials have said lowering import duties on household goods could help cool the rising cost of living in the U.S.
Soaring prices will not only erode the Biden administration’s polling approval ratings, but also hurt the Democratic Party’s November midterm elections. According to data released on Wednesday, the U.S. consumer price index (CPI) rose 8.5% in July from an annual rate of 9.1% in June, but households’ purchasing power continued to be eroded as the growth rate far outpaced wage gains.
Last week, Pelosi became the highest-level U.S. official to visit Taiwan in 25 years, despite China’s threat to visit Taiwan. The incident made China jump, and the Communist army held military exercises around Taiwan for several days, and even simulated a military invasion of Taiwan.
That has prompted American officials to adjust their thinking, reluctant to be seen by China as an attempt to escalate tensions, and to avoid being seen as retreating in the face of Chinese intrusion.
A White House official with knowledge of the matter said: “I think, everything changed in Taiwan. Before the tension in the Taiwan Strait, the president didn’t make any decisions, and he hasn’t until now. All options are on the table.”
Exemption list is another focus
If the question of whether the tariffs will be lifted or not will be put aside for the time being, the outside world will also pay close attention to the so-called exemption list.
The list of exemptions under Trump covered more than 2,200 items, such as critical industrial parts and chemicals, but the exemptions expired when Biden took office last January. Trade Representative Dai Qi reinstated only 352 of them, and industry and U.S. lawmakers hope to exempt more.
The U.S. Trade Representative (USTR) review is underway and is expected to take several months to complete, with the public comment period closing on August 23. U.S. steelworkers’ unions have publicly called on the USTR to maintain tariffs on China, level the playing field for American workers, and reduce America’s reliance on Chinese supplies.
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