Higher inflation factors into review of tariffs on Chinese goods- White House

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White House Press Secretary Jen Psaki holds the daily press briefing in Washington

By Andrea Shalal

WASHINGTON (Reuters) – The Biden administration is carefully studying the inflationary impact of tariffs imposed on China by former President Donald Trump’s administration given a surge in consumer prices, White House press secretary Jen Psaki said on Monday.

Psaki said she had no news on tariff reductions since U.S. Trade Representative Katherine Tai is still reviewing Trump-era tariffs on Chinese goods. But she made clear that higher inflation was a factor in the deliberations.

“This is an ongoing process, and we’re certainly looking at where we see costs being raised and, at a time where we’re seeing heightened inflation, certainly that’s on our minds,” Psaki said.

She said the review was also looking at larger issues, such as China’s behavior in global markets and the impact of tariffs on wages, job opportunities and America’s competitive edge.

The White House comments came days after U.S. Treasury Secretary Janet Yellen said it was “worth considering” taking steps to lower U.S. tariffs on Chinese goods given the “desirable effects” such a move could have on lowering U.S. inflation, which has hit 40-year highs this year.

Deputy national security adviser Daleep Singh told a separate event on Thursday that easing tariffs on non-strategic Chinese goods such as bicycles or apparel could help combat inflation.

Biden’s approval ratings have fallen as the costs of energy, food and other staples have risen, with mounting public frustration threatening to cost Democrats their slim majorities in Congress in midterm elections in November.

Chad Bown, a senior fellow at the Peterson Institute for International Economics, said Psaki’s comments compounded expectations that the Biden administration was considering tariff reductions.

Bown said that would likely require behind-the-scenes negotiations with Beijing. Such a move would also likely cause tensions with a Biden administration push to move supply chains from China and closer to home.

No comment was immediately available from Tai’s office.

(Reporting by Andrea Shalal; Editing by Cynthia Osterman)

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