Yellen says lowering tariffs on imported Chinese goods could ease price pressures

• The U.S. has launched a targeted tariff exclusion process as part of the “Phase 1” trade deal signed in early 2020

• Yellen expects to continue to engage with her counterpart, Vice Premier Liu He, on a range of economic issues

U.S. Treasury Secretary Janet Yellen on Thursday said lowering tariffs that the former President Trump imposed on Chinese imported goods through a revived exclusion process could help ease some inflationary pressures but would be no “game-changer.”

Yellen told the Reuters Next conference that she thinks the tariffs of up to 25% on hundreds of billions of dollars worth of goods imported from China annually “do contribute to higher prices in the United States.”

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“And the Trump tariffs that were put in place, some of them create problems without having any real strategic justification,” she added.

Product-specific tariff

The previous product-specific tariff exclusion on Chinese goods had expired at the end of 2020.

U.S. Trade Representative Katherine Tai has launched a new, targeted tariff exclusion process as part of her engagement with Chinese officials on the “Phase 1” trade deal that was signed in early 2020.

Treasury Secretary cited the exclusion process, along with other steps, including working with ports and private companies to unblock supply chains, which the Biden administration is working on to mitigate price pressures.

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“This is a process by which tariffs can be lowered. And I think that that could be helpful,” Yellen told at Reuters Next Conference. “Again, it’s not a game-changer. But these are things we’re doing to try to mitigate these pressures.”

Working with China

Yellen also said that even though she does not currently have a visit to China on her plan, she expects to continue to engage with her counterpart, Vice Premier Liu He.

The engagement will be based on a range of economic issues, which include China’s technology practices, securities markets, exchange rate practices and China’s efforts to rebalance its economy towards more personal consumption.

She said the latter “could make a big contribution to mitigating global imbalances. These are all topics that we’ve been discussing, and I expect those dialogues to continue.”

Picture Credit: DW