Inflation in the US soars and prices rise to 6.2% 0:56
(CNN) -
US President Joe Biden has presented several measures in the face of rising inflation: investigating gasoline prices, stabilizing supply chains and promoting benefit programs.
Neither offers Americans immediate relief.
At the same time, Biden has resisted a move that he would: lifting tariffs on Chinese imports would save the household an average of hundreds of dollars a year.
And just as tempting, it would reverse the failed trade war policy of his discredited predecessor, Donald Trump.
OPINION |
These are the Americans who bear the brunt of rising inflation
But strategic and political considerations outweigh all of the above.
Whatever the benefit to beleaguered consumers, the implications at home and abroad of America's darkest international relationship raise the stakes.
"The reason for doing this or not doing it shouldn't be inflation," said Richard Haass, one of the State Department's top advisers under President George W. Bush, who now heads the Council on Foreign Relations.
"The impact on US-China relations, and on the domestic politics of US-China relations, would be greater than any impact on inflation."
Those powerful cross currents were stirred last week when Biden met virtually with China's leader, Xi Jinping.
Ahead of the meeting, a number of business groups issued a public letter calling for relief from China's tariffs, which they say cost US importers $ 110 billion and the average American household $ 1.3 billion in 2020. .
advertising
"These costs, compounded by other inflationary pressures, place a significant burden on American businesses, farmers and families trying to recover from the effects of the pandemic," wrote business groups, ranging from the American Soybean Association to the Information Technology Industry Council.
Inflation: everything you need to know about this economic phenomenon
But White House officials said tariffs were not on the US agenda.
After Biden and Xi spoke for more than three hours, and with the White House hit politically by the highest inflation in decades, no policy change was announced.
By taking office after the violent January 6 uprising in the US Capitol, Biden has framed his presidency as an opportunity for the US to show that democracies can outperform authoritarian regimes like China in The 21st century.
On issues such as human rights, Taiwan or the coronavirus, the interactions between the two most powerful nations in the world have become so acute that Biden presented the meeting as an attempt to ensure that the competition "does not drift into conflict."
Yet he still faces Republican allegations of weakness in China policy, a staple of Trump's 2020 campaign. Although Haass called those attacks "absurd," lifting the tariffs unilaterally would only encourage Republicans. to amplify them.
Trump placed tariffs at the center of his "America First" political message, which capitalized on grievances from blue-collar workers who blame the expansion of global trade for destroying and lowering American manufacturing jobs. of life.
The American Action Forum, which promotes the views of market-oriented Republicans, estimates that Trump's tariffs and corresponding retaliation from trading partners currently affect more than $ 400 billion in imports and exports.
And the tariffs did not achieve Trump's goal of reviving American manufacturing.
In 2019, before the pandemic put the economy in check, the Federal Reserve (Fed) said that the manufacturing sector had indeed entered a recession.
But Biden has only lowered tariffs on European steel and aluminum so far.
The most important levies for China on imported consumer goods and intermediate goods that companies use to make finished products remain in force.
Trade experts credit Trump with taking a tougher line after years in which China had flouted global standards by stealing intellectual property, subsidizing domestic industries and restricting imports to the detriment of both American companies and workers. .
He succeeded in pushing Beijing to loosen restrictions on US agricultural imports and the activities of US financial companies in China.
However, the modest effect of Trump's policy on Chinese exporters failed to drive the fundamental economic reforms he sought.
"It really hasn't done much to the Chinese," said Scott Lincicome, an analyst at the libertarian Cato Institute.
"In general, these tariffs are falling almost 100% on American consumers," added Jennifer Hillman, a former Commerce official under President Bill Clinton who now teaches law at Georgetown University.
"The only question for Biden is: 'Can you get anything done by removing these tariffs?'"
Here's what Joe Biden can and can't do to fight inflation
In a speech last month, US Trade Representative Katherine Tai said only that "we will initiate a selective tariff exclusion process" that could lift certain levies in a process that "optimally serves our economic interests." But he noted that China has not kept past promises to buy US products and maintains "unfair policies" that subsidize domestic production of steel, semiconductors and solar energy products at the expense of the United States.
"I am committed to working through the many challenges that lie ahead in this bilateral process to achieve meaningful results," Tai promised at the Center for Strategic and International Studies in Washington.
"But above all, we must defend - to the end - our economic interests."
That doesn't mean that Biden can't find a politically acceptable path to the benefits of lower prices from Trump's lifting of more tariffs in the coming months.
But doing so will require skillful negotiations to win concessions from America's most formidable competitor.
"Like sanctions or war, (tariffs) are easier to initiate than to eliminate," Haass concluded.
"That is why God invented diplomats."
Tariffs China Inflation Joe Biden