Claim That US Inflation Could Improve by 1.5 Percentage Points if Additional Tariffs on Chinese Products Are Lifted
Biden Must Act to Curb Inflation
[Asia Economy Beijing=Special Correspondent Jo Young-shin] As the U.S. Federal Reserve (Fed) took the unprecedented step of raising the benchmark interest rate by 0.75 percentage points to curb inflation, Chinese state-run media have actively begun to argue that the additional tariffs imposed on Chinese products should be withdrawn. They also forecast that there may be changes in President Joe Biden's stance toward China to ease soaring prices.
According to Chinese media including the state-run Global Times on the 16th, Wang Wenbin, spokesperson for the Chinese Ministry of Foreign Affairs, stated at a briefing held the previous day that it is important for the U.S. to withdraw the additional tariffs imposed on Chinese products to alleviate soaring inflation.
Spokesperson Wang emphasized that the withdrawal of additional tariffs on Chinese products would benefit not only the U.S. but also China and the global economy. He added that the essence of China-U.S. cooperation is mutual benefit (win-win), pointing out that no one can be a winner in a trade war or tariff war.
The Global Times further explained that the Biden administration is exploring ways to withdraw the additional tariffs imposed during former President Donald Trump's administration in this regard.
The U.S. Consumer Price Index (CPI) for May, announced on the 10th, rose by as much as 8.6% compared to the previous year. This rate of increase is the highest in 40 years and 5 months since December 1981. As the situation became serious, the Fed also pulled out the ultra-strong card of raising interest rates by 0.75 percentage points on the 15th (local time).
Professor Song Guoyou of Fudan University said, "It is time for President Biden to take action to curb inflation," adding that the withdrawal of tariffs imposed on Chinese products is a very important measure.
He also predicted that if the additional tariffs on Chinese products are withdrawn, U.S. prices would decrease by about 1.5 percentage points.
Gao Lingyun, a researcher at the Chinese Academy of Social Sciences, explained, "If the additional tariffs on Chinese products are withdrawn, U.S. prices will fall by about 1.5 percentage points," adding that it would help stabilize U.S. prices.
The Global Times cited experts saying that tariff removal would help President Biden ahead of the November midterm elections. It also forecast that general consumer goods would be included in the tariff reduction list.
Zhao Minghao, a researcher at the Chinese think tank Cha-haer Society, said, "For the Biden administration to address domestic issues such as inflation, it must properly manage China-U.S. economic and trade relations," interpreting that the China-U.S. high-level talks (between Yang Jiechi, member of the Political Bureau of the Communist Party of China in charge of diplomacy, and Jake Sullivan, U.S. National Security Advisor) were held in this context. He also explained, "The China-U.S. high-level talks are necessary not only for inflation issues but also for diplomacy on issues such as Ukraine and North Korea's nuclear problem on the Korean Peninsula."
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