President Joe Biden said he could remove some of the tariffs imposed on Chinese imports to help control rising consumer prices in the United States – just as Wall Street is preparing for a new report on inflation north of 8%.
The White House is reviewing the penalties imposed on former President Donald Trump – which have raised the price of everything from diapers to clothing and furniture – and may choose to remove them altogether, Biden said in an address to the Washington nation on Tuesday.
“We are considering what would have the most positive impact,” Biden said, adding that the abolition of tariffs is currently being discussed.
Trump imposed numerous financial sanctions on Chinese goods in the long-running trade war with Beijing in an attempt to support American goods.
The extent to which removing Trump’s taxes on Chinese products would cool inflation is a matter of debate among economists, but many say easing or eliminating tariffs is one of the few options available to the White House, which wants to pull any available cost relief lever.
The president reiterated that the combination of Covid-19 protocols at home and abroad and Russian President Vladimir Putin’s invasion of Ukraine has caused US prices to jump at their fastest pace since the early 1980s.
“I want every American to know that I take inflation very seriously,” Biden said. “The first cause of inflation is a pandemic that happens once a century. It has not only shut down our global economy, but completely eliminated supply and demand chains.
“And this year we have a second reason: Mr Putin’s war in Ukraine,” he added, referring to the dramatic rise in oil prices caused by Moscow’s attack earlier in 2022.
While West Texas crude futures were well above $ 130 a barrel in March, oil supply contracts were last seen trading in June for about $ 100, about $ 30 above the beginning of the year.
The president noted that the war has also raised contract prices for key food products such as wheat and corn, which rose 40% and 30% respectively in 2022. Russia and Ukraine together supply more than a quarter of the world’s wheat.
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Economists say the combination of the pandemic – especially China’s recent and heavy efforts to curb growing cases there – and the war in Ukraine are to blame for rising inflation by 8.5 percent in the last year to March, the highest level since 1981. here. Wall Street can’t wait to read the upcoming Labor Department report on April inflation, which is scheduled to be released at 8:30 a.m. ET on Wednesday.
Economists polled by Dow Jones expect the report to show that inflation rose 8.1 percent in the 12 months to April.
Biden’s comments the day before the announcement were the administration’s latest attempt to convince the American public that the White House was exploring all available options to curb rising prices. Dozens of opinion polls show that Americans now believe that inflation is the main problem facing the United States and a threat to economic recovery from the Covid recession.
Although some economic measures have caused a remarkable recovery – US employment levels have remained stable at 3.6% last month – higher gas and food bills continue to undermine wages and cause unrest across the country.
In recent weeks, Biden has tried to allay these frustrations through regular speeches.
Last week, he highlighted a significant reduction in the federal deficit this fiscal year as a key departure from what he described as unbridled spending by his Republican predecessor and a step toward fiscal responsibility and lower prices.
Republicans say the surge in inflation is largely due to Democrats’ ambitious economic policies, including trillions of Covid aid for the US Rescue Plan, and the bipartisan infrastructure law signed by Biden in 2021.
The Republican Party also said federal spending could have been higher and the expected deficit greater if Biden and his fellow Democrats had succeeded in passing a package of climate, housing and labor legislation once known as the plan to restore better conditions.
These attacks pose a political problem for Democrats as they face a tough battle to retain control of Congress in the key midterm elections in November. The Senate is divided 50-50 between Democrats and Republicans, while the House is divided 221-209 in favor of Democrats.
In his latest comments, Biden opposed Republican bolts, publicizing the administration’s efforts to reduce the cost of prescription drugs and raise taxes only for the richest Americans.
“What is the plan of the Republicans in Congress? They do not want to solve inflation by reducing your spending. They want to solve it by raising your taxes and reducing your income,” Biden said on Tuesday. “Their plan will actually make working families poorer.”
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