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APRIL 27, 2022
Kuttner on TAP
Weakening China Tariffs Will Not Relieve Inflation
Some in the administration are again pushing for tariff cuts. Their approach is bad economics and worse politics.
On Friday, Treasury Secretary Janet Yellen reiterated her call for easing tariffs on some made-in-China goods. This followed even more pointed comments Thursday from Deputy National Security Adviser Daleep Singh that duties on consumer goods "serve no strategic purpose."

"For product categories that are not implicated by [supply chain] objectives, there’s not much of a case for those tariffs being in place," he said. "Why do we have tariffs on bicycles or apparel or underwear?"

These comments incensed Tim Ryan, who is running to take back a Senate seat in Ohio, where Huffy bikes used to be made by Ohio workers. "Lifting tariffs on so-called ‘non-strategic’ goods from China would be a major mistake, doing nothing to ease inflationary pressures on American consumers and rewarding a human-rights abusing, communist government for years of cheating American workers and stealing jobs," he told the Prospect in an email. "I will fight like hell against any move—by either political party—that incentivizes predatory trade practices that put China ahead of our workers."

Nor did the remarks sit well with Ambassador Katherine Tai, the U.S. trade representative, who has resisted efforts for a wholesale reduction in tariffs on Chinese goods. At a hearing of the House Ways and Means Committee last month, Tai warned that lifting tariffs now would undermine U.S. bargaining leverage, but do little to reduce inflation.

"No negotiator walks away from leverage, right?" she said. The tariffs are not ends in themselves, but part of a U.S. reset of China policy.

In a column last December, after the push to cut tariffs as anti-inflation medicine first surfaced, I ran the numbers and found that the effects would be trivial. In January, even the Peterson Institute, one of the most fervent advocates of free trade, reported that the impact of tariffs on Chinese goods on inflation was marginal.

There have been conversations inside the administration about better focusing tariffs against Chinese goods, to better target strategic sectors such as semiconductors. In exchange, some other tariffs might be cut. But last week’s comments from Yellen and Singh were not part of those deliberations, which have been on ice due to China’s unhelpful role in the Russia-Ukraine War.

The White House is also in a jam because Republicans are said to be preparing a letter demanding tariff cuts to fight inflation. If the administration were to follow that course now, it would only look like it was succumbing to Republican pressure.

After some fierce pushback from defenders of a resolute China policy, my sources say the White House walked back the comments from Yellen and Singh as merely a trial balloon. A lead balloon, maybe. But this fight is far from over, and the trench warfare continues.

~ ROBERT KUTTNER
Biden Joins D.C. Establishment in Endorsing Corporate Democrat
Kurt Schrader not only got the president’s only endorsement thus far in the 2022 cycle. Local Democrats have accused the DCCC of surreptitiously helping him, too. BY DAVID DAYEN
A Community Hospital in Deep-Red Wyoming
After significant cutbacks and tragedies at their private equity–owned hospital, the community of Riverton, Wyoming, tried something different. BY MAUREEN TKACIK
Meet the Organizations Fighting for Zero-Emissions Freight
A coalition of community-based groups has come together to demand reform of a sector that has had a disproportionately negative impact on communities of color. BY RAMENDA CYRUS
 
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