"US Reconsiders China's Tariff Withdrawal Amid Taiwan Strait Response"

[Image source=Yonhap News]

[Asia Economy Reporter Kim Hyunjung] Reuters reported on the 10th (local time) that the United States is reconsidering whether to lift tariffs on China, which is conducting large-scale military exercises in the Taiwan Strait.

The agency cited sources familiar with the matter, saying, "Due to China's military response surrounding Taiwan, Biden administration officials are readjusting whether to lift some tariffs on China or impose other tariffs." The sources also explained that U.S. President Joe Biden has not yet made a decision on this issue.

So far, the Biden administration has been discussing for a long time ways to ease tariffs on Chinese imports imposed during former President Donald Trump's term to curb soaring inflation. In particular, they considered a combination of lifting some tariffs, initiating a 'Section 301' investigation on additional tariff areas as a trade sanction, and expanding the tariff exclusion list.

However, after U.S. House Speaker Nancy Pelosi visited Taiwan last week, China responded with intense military exercises, raising tensions in U.S.-China relations. The agency quoted a source as saying, "Taiwan changed everything." The official said, "The president had not made a decision even before the Taiwan Strait incident and still has not made one," adding, "All options are on the table." Furthermore, "The only person who can make the decision is the president, and he will decide based on interests," the source elaborated.

The current focus regarding tariffs is on the 'exclusion list.' In 2018, the Trump administration imposed tariffs on 2,200 Chinese products, and in 2020, the Biden administration applied tariff exemptions to all items except 549 through the 'Phase One Trade Agreement.'

From consumer electronics and retailers to the automotive and aerospace industries, various U.S. sectors have demanded the government lift tariffs of up to 25%. Some senior administration officials, including Treasury Secretary Janet Yellen, argued that tariffs on 'non-strategic' consumer goods unnecessarily increase costs for consumers and businesses, and removing them could help alleviate rampant inflation.

The agency forecasted that the U.S. Trade Representative (USTR) is currently conducting a four-year legal review of the tariffs imposed by Trump, which may take several more months to complete.