Yellen Suggests Public Tariff Cuts: "Details Within Weeks... Not a Cure-All for Inflation"

[Image source=Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] Janet Yellen, U.S. Treasury Secretary, confirmed on the 8th (local time) that she is considering partially lifting the high tariffs imposed on Chinese products. However, she also made it clear that such tariff reductions are not a "panacea" for easing soaring inflation, seemingly mindful of the responsibility for inflation.

According to the Wall Street Journal (WSJ) and others, Secretary Yellen appeared before the House Ways and Means Committee hearing that day and said, "We are reviewing ways to restructure the high tariffs on Chinese imports to respond more strategically," adding, "More information will be provided within a few weeks."

Regarding the Section 301 trade law-based tariffs on China, she evaluated, "In fact, it was not designed for our strategic interests," and "The high costs were ultimately borne not by the Chinese but by Americans, harming U.S. consumers and businesses."

She also suggested that tariff reductions could have some effect in calming U.S. inflation, which is at its highest level in about 40 years. Secretary Yellen said, "I think some tax cuts can be justified," and "It can help lower the prices of goods that people find burdensome."

However, she emphasized, "I do not think tariff reductions are a panacea." In particular, she pointed out that Chinese imports subject to tariffs account for only one-third of U.S. domestic consumption, and the impact on consumers is also unclear.

This can be interpreted as drawing a line in response to the responsibility theory surrounding inflation attributed to U.S. President Joe Biden. Ahead of the midterm elections in November, as the so-called "Bidenflation" responsibility theory continues, the administration has recently been actively discussing easing high tariffs on China as one of the measures to ease inflation. It is argued that lowering tariffs would reduce the prices of Chinese imports and help ease inflationary pressures. However, there are also strong voices within the administration opposing this, saying that tariff reductions on China will not significantly affect current inflation.

Secretary Yellen is one of the figures who has positively expressed the need for review since last month. Gina Raimondo, U.S. Secretary of Commerce, also mentioned that tariff relief could have some effect in calming inflation. Daleep Singh, Deputy National Security Advisor at the White House National Security Council (NSC), stated that tariffs on China do not help strategic goals. The high tariffs on $350 billion worth of Chinese imports will expire on the 6th of next month unless extended by the U.S.

The hearing that day was flooded with questions about soaring inflation. Secretary Yellen once again drew a line on the Biden responsibility theory, saying, "Almost all advanced countries are experiencing high inflation." Regarding the criticism that the Biden administration's $1.9 trillion COVID-19 relief bill fueled inflation, she rebutted, "It provided good compensation to Americans and only had a slight impact on inflation."

Having stated the day before that the current U.S. inflation is at an unacceptable level, she also said that day, "I do not see inflation as a problem that will last for 10 years."

This content was produced with the assistance of AI translation services.