Tariffs give US ‘leverage’ in talks with China, says top trade official

U.S. tariffs on Chinese goods offer a key piece of leverage over Beijing that Washington should be reluctant to give up, the top U.S. trade official said Wednesday.

Progress on China’s unfair trade practices has been elusive, making tariffs an important tool, U.S. Trade Representative Katherine Tai told lawmakers.

“Chinese tariffs are, in my view, significant leverage, and a trade negotiator never strays from leverage,” she said in testimony before the Senate Appropriations Committee.

“The United States has repeatedly requested and obtained commitments from China, only to find that lasting change remains elusive,” she added.

President Joe Biden has said he is considering lifting some of the tariffs imposed by his predecessor, Donald Trump, and also plans to speak with Chinese leader Xi Jinping.

White House press secretary Karine Jean-Pierre said Wednesday that no decision had been made on tariffs.

“The president has discussed it with his team,” she told reporters, adding that there was no timeline for an announcement.

But any decision would probably have to be made soon, as some of the tariffs are due to expire from July 6 unless they are renewed.

Successive rounds of tariffs imposed by Trump eventually covered around $350 billion in annual imports from China in retaliation for Beijing’s theft of American intellectual property and forced transfer of technology.

Treasury Secretary Janet Yellen is among those who argue that removing tariffs could dampen inflation, which has soared to a 40-year high and is squeezing American families.

“The tariffs we inherited; some serve no strategic purpose and increase costs for consumers,” Yellen said Sunday.

The administration is considering “reconfiguring some of these fares so they make more sense and reduce some unnecessary charges,” Yellen said.

But Tai said there was a limit to what could be done to deal with rising prices in the short term.

Meanwhile, U.S. homebuilders released a statement urging the administration to remove tariffs on Canadian lumber to ease pressure on homebuyers.

“If the administration is really interested in relieving American citizens of high inflation by removing costly tariffs, it should ensure that Canadian lumber is among the tariffs it aims to eliminate,” Jerry said. Konter, president of the National Association of Home Builders, in a statement.

Washington lowered lumber tariffs in January to 11.64%, but the NAHB calculates the duties have added more than $18,600 to the price of a new home since last August.

Tai told lawmakers she regularly discusses the issue with her counterparts in Ottawa to try to resolve the issue.

But she added, “It requires the Canadian government to be prepared to address the fundamental challenges that we have in terms of the uneven playing field for our industry in terms of how they govern their harvest in their industry.”