US commerce secretary Gina Raimondo conceded that removing US tariffs on Chinese goods would not ease inflation in a “very significant way”, underscoring the White House’s struggle to devise an effective plan to fight high prices.
On Sunday, the senior official in the administration still supported the move. President Joe Biden will be making that announcement. Decide soon. She stressed that it would likely have a limited impact due to the many factors driving up prices.
“Lifting tariffs isn’t going to bring down top-line inflation in a very significant way,” she said in an interview with NBC on Sunday. “What it will do potentially is help consumers on certain . . . Household goods And so for that reason, given where inflation is, I think it could make sense to do it.”
Biden has repeatedly stressed that counteracting inflation, which is running at the fastest pace in four decades, is his administration’s number-one priority, a message Raimondo reiterated on Sunday. The president discussed the possibility of cancelling student loans, and last month proposed a petrol-tax holiday.
Economists WarningMany of the efforts to alleviate households and businesses that are suffering from high costs will either have little effect or make matters worse.
The White House wants to reduce supply-related restrictions, which are a major contributor to the recent inflation spike. Prolonged Covid lockdowns in China have gummed up one of the world’s largest manufacturing hubs, while Russia’s invasion of Ukraine has caused spikes in the costs of energy, food and other essential commodities.
Raimondo stated that Congress must pass a bipartisan bill that will increase domestic supply for semiconductors. The industry has suffered from severe shortages worldwide, which have caused an increase in prices of industrial electronics.
“We have inflation now because of lack of supply,” said Raimondo, calling the bill a “perfect example” of how to bolster capacity.
The president will be heading to Saudi Arabia this week in an effort to reestablish relations with the country that he once considered a pariah. In an article published on Saturday, Biden lauded the kingdom for helping “stabilise oil markets with other Opec producers”.
In recent weeks, energy prices fell as fear of a recession has mounted. This is despite clear signals from the Federal Reserve that they will aggressively increase interest rates to a point that starts to restrict economic activity and restore price stability.
Raimondo on Sunday characterised the Fed’s actions as “strong”, adding that the administration is “doing everything we know how to do” to root out inflation.