Tariffs are not a driver of inflation today
Senate Republicans and Democrats are criticizing claims by President Joe Biden and Treasury Secretary Janet Yellen that US tariffs on Chinese imports have helped spur record inflation for US consumers.
Senators Rob Portman (R-OH), Sherrod Brown (R-OH), Mitt Romney (R-UT), Kevin Cramer (R-ND), Mike Braun (R-IN), Robert Casey (D-PA), books Rick Scott (R-Fla), James Inhoff (R-Ok) and Elizabeth Warren (D-Mass.) write to Biden urging him to maintain US tariffs on billions of dollars worth of Chinese-made products.
“A rollback of tariffs on China would undermine the US position in the negotiations, expose many US companies and workers to a sudden flood of imports, and signal to China that it is better to wait for the US to change its non-market behavior or comply with a Phase 1 agreement.” Senators wrote.
The message comes as Biden and Yellen suggested they wanted to lower US tariffs on China in what they claimed would lower inflation for American consumers.
Research by the Economic Policy Institute (EPI) shows that cutting US tariffs will have little or no effect on current inflation, and likely only bring down consumer prices by 0.3% one-time.
Similarly, senators criticized Biden and Yellen’s claims that lowering US tariffs on China would subsequently reduce inflation:
in conclusion, We note that tariffs are not a driver of inflation today. Not only are tariffs more than three years ahead of current inflation, but Chinese imports make up only 2% of goods included in the Consumer Price Index (CPI) and will not reduce inflation materially. [Emphasis added]
In fact, A lot of the inflation we’re seeing has to do with fuel and food – sectors that have nothing to do with imports from China. To avoid the huge strategic cost of raising tariffs, We urge you to keep tariffs on China in their current formand exercise all tools at your disposal to assert the rights of the United States in the face of China’s unfair economic practices. [Emphasis added]
For years, analysis by Breitbart News has shown that tariffs do not raise prices on Americans. The latest Expanded Program on Immunization (EPI) research suggests there is no relationship between US tariffs, imposed by former President Trump, and current inflation:
It is clear that the timing of the tariffs does not show any relationship with inflation, and the abolition of tariffs cannot reasonably restrain it. The bulk of tariffs were in effect prior to 2020, however inflation did not start to accelerate until March 2021. It is clear that inflation was driven by many sources besides tariffs. [Emphasis added]
Already, the Biden administration has eliminated US tariffs on more than 350 Chinese products — a huge win for multinational companies that have outsourced manufacturing to China.
From 2001 to 2018, US free trade with China eliminated 3.7 million American jobs from the economy — 2.8 million of which were lost in American manufacturing. During the same period, at least 50,000 American factories closed.
These massive job losses coincided with a booming trade deficit between the United States and China. In 1985, before China joined the World Trade Organization, the US trade deficit with China was $6 billion. In 2019, the total US trade deficit with China was more than $345 billion.
Meanwhile, a study from 2019 found that permanent US tariffs of 25 percent on all Chinese imports would create more than 1 million American jobs within five years. American manufacturing is vital to the American economy, as is every manufacturing job supports 7.4 additional US jobs in other industries.
John Bender is a reporter at Breitbart News. Email him at firstname.lastname@example.org. Follow him on Twitter over here.