Biden Still Undecided on Chinese Tariffs, Commerce Secretary Says

The White House has been debating a possible tariff cut for months, with Ms. Raimondo and Treasury Secretary

Janet Yellen

among cabinet members who think a limited tariff reduction would benefit U.S. businesses and consumers who buy Chinese products.

“It all depends on exactly how it is done and on which products…but I think there is merit to it,” Ms. Raimondo said Monday. “That decision is with the president himself. We have briefed him a number of times.”

Labor groups oppose lifting the tariffs, saying the levies have protected domestic manufacturers and encouraged them to invest domestically. U.S. Trade Representative

Katherine Tai

has said the tariffs provide leverage in confronting China, which failed to meet goals set by a Trump-era bilateral trade agreement aimed at cutting the U.S. trade deficit.

Democrats running in tight midterm races also feel vulnerable to Republican attacks of being weak on China and have urged the White House to resist pressure to alleviate some tariffs.

Also weighing against a tariff cut are views of economists and administration officials that such a step would have only a limited one-time impact on price levels.

The discussions have also been complicated by elevated tensions with China over Taiwan following visits this summer by House Speaker

Nancy Pelosi

and other lawmakers to the self-ruled island that China considers its territory.

Mr. Biden has put off a decision for months amid the division among his team and his own caution, and as other issues such as the war in Ukraine and the recently passed Inflation Reduction Act have dominated his attention.

He has been regularly briefed on the pros and cons, according to people familiar with the situation. They say the president has been presented with a package that would include options to reduce tariffs  on consumer products and start a new process to allow importers to request exemption from the levies.

Another proposed action would be to launch a new investigation under Section 301 of the Trade Act targeting Chinese subsidies and practices of state-owned enterprises to protect its strategic industries such as information technology, electric vehicles, biotech and aerospace—a step that could lead to the introduction of a new set of tariffs.

Administration officials had earlier said a tariff cut was to be unveiled as early as July, targeting back-to-school items like bicycles and clothing and other consumer goods that aren’t strategic to the U.S.’s economic competition with China.  

As the main weapon of his trade war with China, former President

Donald Trump

imposed tariffs ranging from 7.5% to 25% on Chinese imports worth roughly $370 billion over four rounds between July 2018 and September 2019.

The U.S. and China signed a trade deal in 2020, but the U.S. kept most levies on Chinese imports as a means to ensure compliance with the accord’s provisions, including promises to increase purchases of U.S. goods.

Write to Yuka Hayashi at [email protected] and Alex Leary at [email protected]

The White House has been debating a possible tariff cut for months, with Ms. Raimondo and Treasury Secretary

Janet Yellen

among cabinet members who think a limited tariff reduction would benefit U.S. businesses and consumers who buy Chinese products.

“It all depends on exactly how it is done and on which products…but I think there is merit to it,” Ms. Raimondo said Monday. “That decision is with the president himself. We have briefed him a number of times.”

Labor groups oppose lifting the tariffs, saying the levies have protected domestic manufacturers and encouraged them to invest domestically. U.S. Trade Representative

Katherine Tai

has said the tariffs provide leverage in confronting China, which failed to meet goals set by a Trump-era bilateral trade agreement aimed at cutting the U.S. trade deficit.

Democrats running in tight midterm races also feel vulnerable to Republican attacks of being weak on China and have urged the White House to resist pressure to alleviate some tariffs.

Also weighing against a tariff cut are views of economists and administration officials that such a step would have only a limited one-time impact on price levels.

The discussions have also been complicated by elevated tensions with China over Taiwan following visits this summer by House Speaker

Nancy Pelosi

and other lawmakers to the self-ruled island that China considers its territory.

Mr. Biden has put off a decision for months amid the division among his team and his own caution, and as other issues such as the war in Ukraine and the recently passed Inflation Reduction Act have dominated his attention.

He has been regularly briefed on the pros and cons, according to people familiar with the situation. They say the president has been presented with a package that would include options to reduce tariffs  on consumer products and start a new process to allow importers to request exemption from the levies.

Another proposed action would be to launch a new investigation under Section 301 of the Trade Act targeting Chinese subsidies and practices of state-owned enterprises to protect its strategic industries such as information technology, electric vehicles, biotech and aerospace—a step that could lead to the introduction of a new set of tariffs.

Administration officials had earlier said a tariff cut was to be unveiled as early as July, targeting back-to-school items like bicycles and clothing and other consumer goods that aren’t strategic to the U.S.’s economic competition with China.  

As the main weapon of his trade war with China, former President

Donald Trump

imposed tariffs ranging from 7.5% to 25% on Chinese imports worth roughly $370 billion over four rounds between July 2018 and September 2019.

The U.S. and China signed a trade deal in 2020, but the U.S. kept most levies on Chinese imports as a means to ensure compliance with the accord’s provisions, including promises to increase purchases of U.S. goods.

Write to Yuka Hayashi at [email protected] and Alex Leary at [email protected]