By Andrea Shalal
WASHINGTON (Reuters) -U.S. Treasury Secretary Janet Yellen on Friday 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.
“We want to do everything that we can to lower inflation,” Yellen told Bloomberg TV, citing steps by President Joe Biden to release oil from the Strategic Petroleum Reserve and moves to address supply chain disruptions.
Cutting tariffs was also “worth considering,” she said. “There would be some desirable effects. It’s something we’re looking at,” she added.
Yellen’s comments come a day after a top White House adviser, Daleep Singh, suggested the United States could lower tariffs imposed on a host of non-strategic Chinese goods such as bicycles or apparel to help combat inflation.
Singh, who serves as deputy national security adviser to Biden, said tariffs imposed by the Trump administration may have given it some negotiating leverage, but they served no strategic purpose.
Lowering those tariffs and focusing on more strategic areas, including critical technologies, could present a good opportunity, he said.
Inflation is a critical concern for Biden, whose approval ratings are falling as the costs of energy, food and other staples increase, and his Democrats are at serious risk of losing their majorities in Congress in midterm elections in November.
Yellen told CNBC in a separate interview that inflation may have peaked in the United States, but cautioned that prices may remain elevated “for a while longer.”
The No. 2 official at the International Monetary Fund, Gita Gopinath, said at an event that the risk of fragmentation in the global economy was a key topic during this week’s meetings of IMF and World Bank members.
Many countries were seriously questioning their approach to global trade, how to shore up their supply chains, and how to protect themselves from hostile trading partners, she said.
But policies that moved countries to be more “inward looking” could increase inflationary pressures, she said, urging countries to work together to improve resilience in a “shock prone world.”
“You don’t want to throw the baby out with the bath water,” she said.
(Reporting by Andrea Shalal and David Lawder; Editing by Bill Berkrot)