U.S. reviews China tariffs, possible pause on federal gas tax to curb inflation -Breaking
WASHINGTON, (Reuters) – President Joe Biden’s administration will be reviewing whether to remove some Chinese tariffs and if there is a pause in federal gas tax. This comes as the United States struggles with rising gasoline prices and inflation.
Janet Yellen, U.S. Treasury Secretary, stated that some China tariffs inherited from former President Donald Trump’s administration served no strategic purpose and suggested that Biden might consider removing them to lower inflation.
Jennifer Granholm, Energy Secretary, said that the President was considering a suspension of federal gas tax in order to lower prices. Granholm told CNN that this was not off the table.
This comes as the Biden Administration struggles to combat record high gasoline prices, and inflation. It is now at its highest level for over 40 years.
Loretta Mester of Cleveland Federal Reserve Bank stated that inflation would take at least two years before it reaches the 2% goal.
Yellen spoke to ABC News and stated that the administration is reviewing China’s tariff policy. However, she did not cite any specifics, declining to give a time frame or indicate when a decision might be made.
“We recognize China’s unfair trade practices. But the tariffs we inherit, some of them serve no strategic purpose or increase cost for consumers,” she stated.
Biden stated that he’s considering eliminating some tariffs on Chinese goods valued at hundreds of millions of dollars by his predecessor in 2018, and 2019, amid a fierce trade war between the two world’s largest economies.
U.S. OFFICIALS SAY RECESSION ‘NOT INEVITABLE’
Granholm, Yellen and Yellen both reiterated Biden’s stance that a slump was not inevitable. The treasury secretary said that the labor market and consumer spending remained robust. Mester said that she wasn’t predicting a recession, despite slower growth.
However, Yellen described inflation as “unacceptably” high and said she expects the economy to slow.
The Federal Reserve and Biden have been concerned that the United States, world’s biggest economy, might slip into recession.
Lawrence Summers, former U.S. Treasury secretary, told NBC News that he did not agree with current officials’ assessment and predicted a recession.
Summers indicated that it was likely that to prevent inflation, the Fed would raise interest rates sufficiently to cause the economy to slip into recession.
Inflation has become a concern for almost all Federal Reserve policymakers. Only one dissented this week from what was the largest rate hike in over a quarter century.