WASHINGTON (Reuters), U.S. Treasury secretary Janet Yellen stated that the United States expects China to fulfill its obligations under Phase 1 of the trade agreement signed by former President Donald Trump. However, the United States could consider lowering tariffs in a mutual way.

In an interview, Yellen explained to Reuters that tariffs increase domestic prices. They also raise the costs of inputs like aluminum and steel. Therefore, lowering tariffs would be “disinflationary.”

Officials from the Treasury Secretary and others insist that current prices are due to supply chain bottlenecks as well as higher energy prices. However, they believe inflation will ease by the end of the 2022-23 period.

Chinese officials repeatedly called on the Biden administration for an end to Trump’s tariffs.

The U.S. has resumed exclusion processes that could result in some tariffs being eliminated, however they have not considered larger rollbacks.

When asked if Chinese tariffs could reduce inflationary pressures, Yellen replied that that is generally true. However, Washington still needs China to fulfill its promise to purchase $200 billion more U.S. services and goods under the bilateral trade agreement, which took effect February 2020.

“Our trade representative stated that additional tariff reductions would be considered,” she added. While we want China to honor their pledges under Phase 1, stabilizing some tariffs and possibly eventually decreasing them in a mutually beneficial manner could also be desirable.

Officials from the United States and Europe announced Saturday a partnership to remove some European tariffs. They also stated that this move may help reduce price pressure for some producers.