Biden Admin Discussing End to Trump’s China Tariffs
Last week, there was an interesting exchange between President Biden and a reporter, during which the president said his administration is currently discussing dropping the tariffs that President Trump placed on China.
The Tariff Exchange
After delivering a speech largely focused on inflation – which has been so bad under this administration, people have started calling it “Bidenflation” – the president took a question from a reporter who asked, “Will you drop former President Trump’s China tariffs?”
“We are discussing that right now,” President Biden answered. As the president stumbled through adding, “We’re looking at what would have the most positive impact,” the reporter interjected, “So we’re never to erase them?”
“No, I didn’t say that.”
“I’m telling you we’re discussing it, and no decision has been made on it.”
That was the last answer President Biden gave to the press before shuffling away from reporters shouting questions like, “How long should Americans be prepared to pay this much at the pump?”
Actual Answers Would Be Nice
Obviously, the president has no answer for that latter question. Americans should just expect gas prices to continue to climb, as the president has attacked American oil – and our fossil fuels in general – since taking office, and even now continues to do so. While the gas question is a more pressing issue for most Americans (heck, I paid $90 yesterday to fill my car’s gas tank even after using the Upside app to find a gas station that was 59 cents per gallon cheaper than what others were charging), shippers who import from China would love an answer on the tariff question.
Although President Biden’s answer on the tariffs on Chinese goods was something of a non-answer answer, it did drive many news outlets to publish stories about President Biden revealing it’s a possibility that a trade policy change could be on the way that many are surprised hasn’t already happened.
China Tariffs Appear a Biden Anomaly for Trump Era Policy
When Biden came into the Oval Office, he immediately got to work trying to do away with as much Trump era policy as possible. In the frenzy of executive orders, actions, and declarations, one area of Trump Administration policy the Biden Administration didn’t touch was the tariffs the previous president put in place against China, despite some people urging him to do so.
While the former president was certainly controversial, it was hard to criticize President Trump on economic policy. The U.S. economy flourished under Trump policies until a global pandemic brought national lockdowns to the U.S. and most of its trade partners around the world. However, there was one area of economic policy where economists really debated whether President Trump’s moves were good or bad for the U.S.
Obviously, that area was the trade war with China and the tariffs that came with it.
Of course, one of the people vocally critical of President Trump’s tariffs on China was Biden while running for president. After becoming president, Biden had no problem halting Trump policy on things like the southern border, where the Biden Administration thereby – and completely unsurprisingly – created a border crisis with more kids in cages than was ever seen under President Trump. Why wouldn’t Biden take the same cavalier attitude toward President Trump’s policy on China, which Biden said Trump was going about “all the wrong way” when the former vice president on the campaign trail was specifically asked about the tariffs?
From Tariffs to an Overshadowed Deal
Despite criticism of the tariffs on China, they were a success for President Trump. One of the winning issues that helped get Donald Trump into office in 2016 was promising to be tough on China. Since Bill Clinton ran and won, presidential candidates have promised to be tough on China, but President Trump was the first to actually follow through on that promise. Larger and larger tariffs on China helped garner him the Phase One Trade Agreement signed by President Trump and China’s chief trade negotiator, Vice-Premier Liu He on January 15th, 2020.
At that moment, China was trying to keep quiet a novel coronavirus that had been breaking out in Wuhan. The pandemic that ensued completely overshadowed the trade deal. Despite the deal, which I examined chapter by chapter in a three-part blog series, being very favorable for the U.S. and full of concessions by China, conditions like the amount of goods China agreed to import from the U.S. were not met, with COVID-19 providing more than enough excuse.
Biden’s Peril in Pulling the Tariffs
If President Biden were to now drop the tariffs on China, letting the country ignore the trade deal and not getting anything in return, he would look even weaker on China than he already does after his administration, also last week, changed the official language on China to say the United States “[acknowledges] the Chinese position that there is but one China and Taiwan is a part of China” and that the U.S. “does not support Taiwan independence.”
President Biden has the additional complication of federal investigations into the business dealings of his son Hunter Biden’s in China. President Trump’s trade war with China, and all its tariffs, was clearly worse for China than for the United States. Making a move that benefits China more than it benefits the U.S. would likely be another political blunder for President Biden.
Unfortunately, removing the tariffs on China wouldn’t alleviate the inflation problems in the U.S. despite a few pointing at the tariffs as a cause for the inflation. Even President Biden, who loves to blame anything bad on President Trump, doesn’t blame Trump’s tariffs for inflation. At the beginning of his speech, Biden blamed inflation on two “leading causes”: the pandemic and the war in Ukraine.
Of course, he did. And, of course, that’s also not true.
The biggest driving force behind inflation is the reckless and, frankly, out of control printing and spending of money by the trillions of dollars by the U.S. government. That’s killing the value of the U.S. dollar, causing the price of everything, including gas, to go higher and higher and, yes, higher still.
Despite all this, President Biden might remove the tariffs, but shippers who import from China shouldn’t hold their breath.