Yes, Lift the China Tariffs

Clark PackardIn March, inflation reached8.5 percent, the highest level since 1981. From the Federal Reserve to the Biden administration to Congress, policymakers are increasingly looking at ways of putting downward pressure on prices. During an interview last week with Bloomberg TV about ways to combat inflation, Treasury Secretary Janet Yellensaid that lowering tariffs on imports from China is “worth considering.” As my Cato colleague Scott Lincicomenoted on Twitter, it ’s not worthconsidering, it ’s worthdoing.Inflation is being driven by a complicated imbalance of supply and demand — loose fiscal and monetary policy are the primary culprits in pushing up demand. Meanwhile, the tariffs are a serious impediment to increasing supply. Smarter trade policy is not a silver bullet for reducing inflation, but it could help on the margin. Indeed, there are a number of reasons for the Biden administration to lift the tariffs on imports from China – and other Trump‐​era tariffs.First, as noted, with inflation reaching 40 ‐​plus year highs,recent research from Gary Hufbauer, Megan Hogan and Yilin Wang of the Peterson Institute for International Economics (PIIE) finds that eliminating the Trump administration ’s trade war tariffs on Chinese imports as well as steel and aluminum imports could shave about 1.3 percentage points off inflation. Likewise, PIIE’s research finds that relaxing Buy American rules for federal procurement would cut infla...
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs