Treasury Secretary Janet Yellen said Wednesday that tariff cuts on Chinese goods may be warranted as the White House tries to quell the highest inflation in four decades, but said such cuts are not a “panacea” to soaring consumer prices.
During testimony before the House Ways and Means Committee, Yellen said the Biden administration was seeking to reconfigure some of the Section 301 tariffs on Chinese goods imposed by former President Donald Trump to be “more strategic in the face of Beijing’s trade abuses.
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“I think some discounts may be warranted and could help bring down the prices of things people buy that are expensive,” Yellen said. “I want to be clear, honestly, I don’t think pricing policy is a panacea when it comes to inflation.”
She noted that the goods accounted for only a third of consumption in the country and said there was little evidence that tariff reductions could directly benefit consumers. Still, she said some of the existing tariffs have hurt American consumers and businesses.
Commerce Secretary Gina Raimondo confirmed on Sunday that President Biden is considering lifting some tariffs on Chinese goods as he seeks to contain voter outrage over the highest inflation in four decades and convince Americans that his administration was maximizing its efforts to control prices.
“We are looking at it. In fact, the president asked us his team to analyze this. And so we are in the process of doing it for him and he will have to make this decision,” Raimondo said in an interview on Sunday. . on CNN.
Yellen was asked about inflation during her two-day appearance on Capitol Hill, during which she said the United States was facing “unacceptable” levels of inflation due to the COVID-19 pandemic. 19 and the Russian war in Ukraine.
“We are currently facing macroeconomic challenges, including unacceptable levels of inflation as well as the headwinds associated with the disruptions caused by the effect of the pandemic on supply chains, and the effects of supply disruptions on oil and food markets resulting from Russia’s war in Ukraine,” Yellen said in prepared remarks.
Yellen said elements of Biden’s proposed spending legislation — including prescription drug market reform and clean energy initiatives — could help cut costs for many American families.
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But she offered few solutions to calm the highest inflation in nearly four decades beyond that, and noted that any action by the White House or Congress would only accompany measures taken by the Federal Reserve.
“To ease inflationary pressures without undermining labor market strength, an appropriate fiscal stance is needed to complement the Federal Reserve’s monetary policy actions,” she said. Moving forward, elements of the President’s proposed legislation — including clean energy initiatives and plans to reform the prescription drug market — can help reduce the costs paid by American consumers. “