Guest opinion: Mr. President, tear down those tariffs on China
This is an opinion column
President Biden has done nothing about the Section 301 China tariffs put in place by the previous administration. They were imposed to change the behavior of the Chinese government and stop its unfair trade practices. Instead, they have resulted in the loss of more than a quarter million American jobs and prompted retaliatory action from China. The rollback and removal of those tariffs within the next two years would immediately benefit US consumers and businesses through lower prices and increased economic output. It is time to end the US-China trade war.
The previous administration imposed the tariffs five years ago following investigations that revealed China’s unfair policies and discriminatory trade practices. The United States Trade Representative reported on China’s acquisition of strategic assets in the US and China’s engagement in intellectual property theft. The Treasury designated China as a currency manipulator. The Trump administration reacted and applied tariffs to nearly half of all Chinese imports. But the tariffs did not work as intended.
Today, the Section 301 tariffs apply to more than $330 billion worth of goods from China—with a particularly high tariff rate of 25% affecting $250 billion worth of goods. Yet, there has been no change in China’s practices that the tariffs were meant to stop. Trade between the US and China was at its highest ever in 2022 and totaled $690 billion. With more than three-quarters of that being imports from China, the tariffs continue to hurt US businesses and harm consumers through higher prices.
Removing tariffs would especially benefit low-income families. The Section 301 tariffs are unevenly weighted toward lower-income households through the additional taxation of everyday consumer goods. The cost of importing certain goods, such as apparel and footwear, has increased dramatically, and the cost burden is primarily pushed onto consumers through higher prices. To date, the tariffs have cost the average American family between $800 and $1,200 yearly since they were imposed in 2018.
Removing tariffs would reduce the inflationary pressure on the economy. Their removal would immediately lower the costs of goods. While estimates vary of a decrease in the inflation rate from 0.3% to 1.3%, any reduction would be very positive in the current economic environment. Certain tech products, such as network routers and phone chargers, have been hard hit by tariffs. Removing the tariffs would immediately make such products more accessible and affordable.
Removing tariffs would allow the Biden administration to distance itself from the protectionism of the previous administration. It offers the administration the chance to display its commitment to a freer trade agenda going forward. Rolling back the Section 301 tariffs is an opportunity for President Biden to claim the high ground and help American consumers and businesses.
Critics argue that rolling back the tariffs will undermine the US industries and result in job losses. The opposite is true. The tariffs themselves have been killing American jobs since the day they were imposed. Their removal will benefit both employment and growth. Trade is a generator of jobs, and removing the tariffs would sustain the more than 7 million American jobs supported by trade with China.
Rolling back the tariff does not mean an end to the fight against China’s unfair economic practices: The behavior of the Chinese government can, and needs, to be stopped through other measures—and the US has other more efficient tools. They include targeted financial sanctions or intensified diplomatic actions coordinated with allies against China.
The intentions were good. Tariffs were supposed to help American businesses by leveling the playing field when competing against China’s unfair trade practices. However, they have done the opposite. American consumers are paying the price. Let’s help low-income families, fight inflation, and boost American business. Mr. President, tear down those tariffs!
Thomas Sand Nielsen is currently a Masters in International Economic Policy candidate at the Elliott School of International Affairs at The George Washington University. He is a graduate of the University of South Alabama.