Yellen and US trade representative disagree on tariffs against China

U.S. President Joe Biden will have to resolve a heated domestic debate among his aides over cutting taxes on Chinese goods as his administration tries to fight inflation, two U.S. officials and three other sources familiar with the news said. conversations.

Biden administration officials have for months debated the future of tariffs of up to 25% on hundreds of billions of dollars in imports from China adopted by former President Donald Trump, which have cost US companies billions.

US Treasury Secretary Janet Yellen is among those wanting to reduce many of those tariffs, while US Trade Representative Katherine Tai wants to wait for a broader trade strategy involving China that addresses job protection. in the US and China’s behavior in global markets, sources say.

This approach could even include new strategic tariffs.

Clear division is rare in a White House that has made adopting a unified front part of its fundamental approach to governing the world’s largest economy.

Fueling the debate, unions that are crucial to the Democrats’ November campaigns are opposed to easing tariffs right now, an aide said. Biden personally told union leaders that they would be involved in any final tariff decisions.

Inflation soared 8% last year, putting pressure on Biden and the Federal Reserve to cut costs for products like gasoline and other consumer goods.

Yellen has publicly said that “it is worth considering” tariff cuts against China for their “desirable effects” on reducing inflation.

Tai believes the tariff arrangement on China needs to be decided as part of an overall trade strategy with the country that takes a more strategic approach, said a person familiar with the discussions.

The split between Yellen and Tai will likely force Biden to make a decision by the middle of the year, according to a person in contact with government officials.