Expectations for Biden lifting US tariffs dims after clear signal

By Wang Cong Source: Global Times Published: 2020/12/3 19:48:40

Anti-tariff posters are seen on a life vest outside the building of US International Trade Commission in Washington D.C., the United States, June 17, 2019. (Xinhua/Liu Jie)

Market expectations for US President-elect Joe Biden to remove costly tariffs on hundreds of billions of dollars worth of Chinese products, which have been ruled illegal by the WTO and drawn court action by 3,500 US companies, have dimmed after Biden signaled that he might continue the trade war launched by incumbent Donald Trump.

In an interview with the New York Times on Wednesday, Biden said that he is "not going to make any immediate moves, and the same applies to the tariffs," adding that "I'm not going to prejudice my options."

While the US has been lowering certain tariffs and issuing exemptions for some products, as part of the phase one trade agreement with China, it has left in place tariffs of 25 percent on about $250 billion worth of Chinese products. 

The tariffs were deemed by a WTO panel as a violation of global trade rules, and they have been widely criticized in the US as costly for businesses and consumers. Some 3,500 US companies have filed lawsuits against the Trump administration over the tariffs. 

During the election campaign, Biden criticized the tariffs and Trump's trade policies, raising expectations that he would remove the tariffs once he took over the White House. However, in the interview, Biden made it clear he would not do so, at least immediately.

"To a certain degree, this is within our expectations because Trump has made the tariffs the most important tool in being 'tough' on China and Biden has vowed to be even tougher on China, so there is not much he can do," Gao Lingyun, an expert from the Chinese Academy of Social Sciences in Beijing, told the Global Times on Thursday.

However, Gao said that Biden will eventually remove the tariffs because "as he pointed out before, the tariffs hurt US businesses and farmers." He said that there are several key developments to watch for decisions on the tariffs, including court rulings on the lawsuits filed by the 3,500 US companies. If the court rules that the tariffs are unlawful, "Biden will then be in a better place to call off the tariffs," Gao said.

In the interview, while making clear he would not remove the tariffs immediately, Biden also appeared to leave some room for future maneuvers, as he suggested that he would consult with US allies on the issues. Chinese experts said that many major economies, including US allies, are against the protective tariffs, with some of them facing the tariffs themselves.

"Once Biden returns to global forums like the G7, he might reach some consensus with other world leaders and decide to remove the tariffs, which are bad for the global economy," Gao said. "I think he will remove the tariffs, it's just a question of timing."


blog comments powered by Disqus