Biden administration officials have revised their thinking about whether to eliminate some tariffs or maybe impose new ones on Beijing in light of China's military exercises around Taiwan, Reuters reported on Wednesday.
Citing sources familiar with the secret discussions, the report revealed that the administration has put those options on hold for the time being.
In an effort to slow the rate of inflation, President Joe Biden's team has been experimenting for months with different strategies to reduce the costs of levies placed on Chinese imports under his predecessor Donald Trump, the sources claimed.
The White House has supposedly given consideration to a number of options, including the removal of some tariffs, the beginning of a new "Section 301" inquiry into potential areas for additional tariffs, and the expansion of a list of tariff exclusions to assist American businesses that can only source specific supplies from China.
According to the White House, Biden has not decided on the matter and all of his options are still open.
The tariffs increase the cost of Chinese imports for American businesses, which drives up the price of goods for consumers. Before the November midterm elections, which might give Republicans control of one or both houses of Congress, bringing down inflation is indeed a number one priority for Biden.
And amidst the backdrop of the intensifying political campaigning in the US, ballistic missile launches and Chinese military drills were carried out around Taiwan, which China claims to be a part of its territory.
"I think Taiwan has changed everything," one of the sources is quoted as saying.
Still, according to Saloni Sharma, a White House spokesperson, before the recent events in the Taiwan Strait, the president had not made a decision, and he still has not made one.
"Nothing has been shelved or put on hold, and all options remain on the table," Sharma said. "The only person who will make the decision is the president – and he will do so based on what is in our interests."
Notably, in an interview with Bloomberg TV earlier, when asked why a decision was taking so long, Gina Raimondo, the secretary of commerce, cited the challenging geopolitical environment.
"After Speaker Pelosi's visit to Taiwan, it's particularly complicated. So the president is weighing his options. He is very cautious. He wants to make sure that we don't do anything which would hurt American labor and American workers," she said.
According to Reuters, the administration's considerations have been made more difficult by a number of factors in addition to China's stance on Taiwan. US officials thought about removing some of the tariffs, but a request for a reciprocal rollback was allegedly turned down by Beijing.
The unilateral lifting of some US tariffs on Chinese imports, according to sources, has been delayed in part because China has not demonstrated any readiness to take reciprocal moves or fulfill its "Phase 1" trade deal commitments.
A spokesperson for the Chinese embassy in Washington told Reuters in turn that there were "severe" difficulties in the two nations' economic and trade relations.
"The visit has undermined the political foundation of the China-US relations and will inevitably cause major disruption to the exchanges and cooperation between the two sides," Liu Pengyu said.
According to the report, Biden has been anxious about reducing tariffs in part because labor is a crucial constituency for him and because China has not bought the goods it had pledged to buy under the 2020 agreement on easing tariffs.
The White House has so far refrained from providing a timetable for when a decision would be made.
More than 2,200 import categories, including many essential chemicals and industrial components, had been granted tariff exemptions by the Trump administration, but they were set to expire as soon as Biden assumed office in January 2021. Only 352 of them have been reinstated by US Trade Representative Katherine Tai. She has reportedly been pushed to greatly raise the numbers by business organizations and more than 140 US politicians.
Trump placed the tariffs in 2018 and 2019 on hundreds of products from China valued at $370 billion in an effort to put pressure on China over what he claimed to be the theft of American intellectual property.