Why Should Biden Ditch Trump’s China Tariffs?
US President Joe Biden will not rescind Donald Trump's tariffs on imported Chinese goods for China’s benefit. But he has three stronger reasons to do so: The measures have hurt American workers and firms, failed to reduce the overall US trade deficit, and arguably further weakened respect for global economic rules.
NEW YORK – Over the course of his presidency, Donald Trump raised US tariffs on imports from China several times, from an average of about 3% when he took office in January 2017 to over 20% by the end of 2019. As a result, the current average US tariff on Chinese goods is essentially at the same level that the United States imposed on the rest of the world in the early 1930s under the Smoot-Hawley Act, a protectionist measure that many economists blame for the severity of the Great Depression. Now that President Joe Biden is reversing many of Trump’s policies, including import tariffs on European goods, he has to decide whether to rescind his predecessor’s China tariffs, too.
Biden will not do so for the benefit of Chinese workers or firms, not least because he needs to protect himself from accusations of being too soft toward America’s main global rival. But he has three stronger reasons to ditch the tariffs: They have hurt American workers and firms, failed to reduce the overall US trade deficit, and arguably further weakened respect for global economic rules.
Of all evidence-based studies by US-based economists, none has found that Trump’s trade war benefited American households or businesses. Mary Amiti of the Federal Reserve Bank of New York, Stephen Redding of Princeton University, and David Weinstein of Columbia University have studied Trump’s six tariff hikes on Chinese goods during 2018, which increased the share of US imports facing a duty of 10% or more from 3.5% to 10.6%. Contrary to what Trump and his senior trade officials claimed, the higher tariffs fed through almost entirely into higher prices paid by American consumers.