Desperately searching for effective answers to the inflation crisis gripping the nation, the Biden administration is reportedly considering relaxing tariffs on China that were imposed by former President Donald Trump.
Though President Joe Biden released a plan on combating the issue last week, even members of his own administration are admitting they were wrong and “underestimated” the painful effects of record-setting inflation.
“Inflation’s a problem, I will grant you that, and we will get it under control because we’re going to stick with it and see it through,” Commerce Secretary Gina Raimondo said Sunday on CNN’s “State of the Union” after host Jake Tapper noted she and other administration officials “got it wrong” on predictions about the economy.
Raimondo still blamed Russian President Vladimir Putin’s invasion of Ukraine for soaring gas prices and the supply-chain issues following the COVID pandemic lockdowns for the pain Americans are experiencing in their wallets. But she later admitted that the administration is “looking at” lifting some Trump-era tariffs on China that affect household goods.
“You previously said those tariffs have been effective. But do you still believe those tariffs should remain in place, even if it means those companies passing the cost on to American consumers, wouldn’t that be one small fix the Biden administration could make?” Tapper asked.
“We are looking at it. In fact, the president has asked us on his team to analyze that. And so we are in the process of doing that for him and he will have to make that decision,” Raimondo replied while admitting that some tariffs on China’s goods will have to remain in place due to national security concerns.
“I will say it depends on what we’re talking about, what kinds of products. For example, steel and aluminum, we’ve decided to keep some of those tariffs because we need to protect American workers and we need to protect our steel industry. That’s a matter of national security. There are other products, household goods, bicycles, et cetera, and it may make sense. I know the president is looking at that,” she added.
The Commerce secretary’s admission about the inflation predictions follows remarks by Treasury Secretary Janet Yellen.
“I think I was wrong then about the path that inflation would take,” Yellen said in an interview last week. “There have been unanticipated and large shocks to the economy that have boosted the energy and food prices, and supply bottlenecks that have affected our economy badly. That I didn’t, at the time, fully understand.”
Yellen admits she was wrong on inflation.
What else is she wrong about?pic.twitter.com/lQ2h9khynO
— Justin Hart (@justin_hart) May 31, 2022
According to Forbes:
Beginning in 2018, Trump’s initial tariffs targeted steel and aluminum, materials the U.S. has accused China of dumping onto global markets at low rates, contributing to an oversupply. Tariffs were later expanded to target consumer goods like clothing and sporting supplies. In 2020, China and the Trump Administration signed the Phase One trade deal, under which China agreed to purchase an additional $200 billion of U.S. goods per year in return for the loosening of some tariffs. The following year, Biden reversed some of his predecessor’s tariffs, but left in place tariffs on over $360 billion of goods. China’s apparent failure to meet the terms of the Phase One deal could make it harder for the Biden Administration to justify a comprehensive easing of Trump-era tariffs.
To his credit, Tapper pressed Raimondo about the failure of the Biden administration in handling the economic crisis, asking why they were “caught flat-footed” by skyrocketing gas prices and the nationwide baby formula shortage, among other emergencies.
“You heard Secretary Yellen say this week she got it wrong about inflation. In July, you told Bloomberg that inflation would be temporary, about a year ago. As recently as six months ago you were calling inflation, quote, a short-term problem, not a long-term problem. So, you got it wrong, too,” he told Raimondo, who served as Rhode Island’s governor until 2021.
She offered a laundry list of excuses, ranging from COVID, to Putin, to Americans’ demands in the post-pandemic months. She even cited former Secretary of the Treasury Larry Summers who said “you’re starting to see inflation come down.”
“Well, all due respect, Larry Summers a year ago, more than a year ago, was saying the Biden administration was putting too much money into the economy, flooding too much money into the economy and he was concerned about inflation and the Biden administration official said that Larry Summers was wrong, and it turns out he was right,” Tapper shot back.
Saying she did not “really agree with that characterization,” Raimondo went on to sing the praises of the American Rescue Plan passed in response to the pandemic.
“Why does it seem the Biden administration is consistently playing clean-up on these problems that are playing out exactly as many experts forecast they would instead of heading them off before they become a crisis?” Tapper pressed the secretary.
“That’s one way to look at it,” Raimondo responded, going on to recall her time as Rhode Island governor and insisting that “America is back to work. Wages are increasing, the labor market is strong, people have not been thrown out of their homes.”
“Yes, inflation is a problem. In no way do I want to minimize that. The fed is independent,” she added. “Fundamentally, what we have here is a robust economic recovery. And I think that’s in large part due to the president’s leadership.”
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