U.S. President Joe Biden is only considering lifting tariffs on $10 billion worth of Chinese goods, while launching a new exemption application process for companies, POLITICO reported on Tuesday.
The Biden administration is reviewing possible adjustments to tariffs on Chinese goods exported to the United States, hoping to reduce the deteriorating inflation. “Bloomberg” earlier quoted sources as saying that Biden announced as soon as this week that he would cancel the additional tariffs on some Chinese consumer goods. tariffs and the potential launch of a new investigation into industrial subsidies that could eventually lead Washington to impose more tariffs in strategic areas such as technology. Biden has not made a final decision and may delay the announcement, the sources said.
The POLITICO report on Tuesday further pointed out that the Biden administration is currently considering only a small amount of Chinese tariff relief.
Under a plan being discussed within the administration, Biden would remove tariffs on $10 billion of Chinese goods worth $370 billion, including consumer goods such as bicycles. In addition, the U.S. Trade Representative (USTR) will initiate a new application process for tariff exemptions and a new Section 301 investigation into Chinese subsidies to strategic industries.
White House press secretary Karine Jean-Pierre responded on Tuesday that the Biden administration is still studying options for additional tariffs on China.
Chinese official media mentioned that there is no need to be too optimistic about the possible reduction of tariffs by the US.
U.S. inflation has soared more than 8% recently, and economists believe that tariff cuts will reduce overall U.S. inflation by about 0.3 percentage points, with a fairly limited impact.Investment bank Barclays said the U.S. cancellation of tariffs on some Chinese goods is a drop in the bucketRMBwill only have a modest impact.
Bloomberg economists also believe that the impact of removing some tariffs on U.S. inflation will be limited because Chinese imports affected by trade war tariffs make up only a fraction of U.S. consumer goods, with food, energy and housing costs bringing high inflation, more important than electronics, textiles, toys, furniture, and bedding.
Analysts believe that Micron (MU-US) and Intel (INTC-US) and other chip makers rely on the Chinese market and are vulnerable to trade tensions, and any good news from the U.S. and China would help tech stocks climb despite the limited impact of tariff cuts on inflation.