During a recent question-and-answer session, Treasury Secretary Janet Yellen explained the Biden administration's stance on maintaining Trump-era tariffs on Chinese imports. Yellen emphasized that the decision was based on China's failure to address unfair trade practices highlighted in the Section 301 action.
Yellen stated that until China takes meaningful steps to rectify these practices, President Biden believes that lowering tariffs would not be appropriate. The tariffs, initially imposed by Trump on approximately $300 billion worth of Chinese goods, have been retained by the Biden administration. Additionally, following a comprehensive review by the US Trade Representative's Office, some rates on $15 billion of Chinese imports were increased.
Yellen also criticized certain policy proposals from the previous administration, particularly regarding tax cuts. She highlighted the importance of maintaining a responsible fiscal policy and expressed concerns about the potential impact of extending tax cuts without proper funding. Citing estimates from the Congressional Budget Office, Yellen warned that extending tax cuts could lead to an additional $5 trillion in deficits over the next decade, a burden that the country cannot afford without appropriate measures to offset the costs.
Yellen's remarks underscore the administration's commitment to addressing trade imbalances and ensuring fiscal sustainability in the face of evolving economic challenges. The decision to maintain tariffs on China reflects a strategic approach to incentivize fair trade practices and hold trading partners accountable for their actions.
