WASHINGTON (Reuters) – The Biden administration is weighing concerns about commodity shortages and inflation as it reviews trade tariff policy, the top White House economist said on Friday.
Strong demand for consumer goods and other products in a U.S. economy still scarred by the coronavirus pandemic have led to shortages in commodities from lumber to computer chips.
Asked whether tariff reduction would help solve shortages and inflation, Cecilia Rouse, chair of the White House Council of Economic Advisers, told reporters at a press briefing on Friday, “Our trade representatives are looking at all of these factors.” A spokesman for U.S. Trade Representative Katherine Tai did not respond to a request for comment.
Strong demand for commodities and the higher prices that have resulted are among the factors stoking fears of inflation.
The United States is the world’s largest importer of goods, at some $2.5 trillion in 2019, and any trimming of tariffs to alleviate shortages and high prices could have widespread repercussions. The United States currently levies average tariffs of 19.3% on imports from China and 3% on those from the rest of the world, according to the Peterson Institute for International Economics.
Import prices rose for a sixth straight month in April, lifting the year-on-year increase to 10.6%, the most since October 2011, Labor Department data showed on Friday.
Higher prices on cars, homes and computers, which eat away at incomes and could derail the economic recovery, have been one of President Joe Biden’s key concerns – along with controlling the pandemic – since he took office in January.
Yet his administration has so far largely stuck with taxes imposed by the Trump administration that add to the cost of goods, including steel and aluminum, imported from abroad. So far, the White House has dismissed signs of inflation as fleeting.
Lawmakers from both political parties have pressed for relief from those tariffs, as have companies.
A bipartisan group of 40 U.S. senators asked here Tai last month to start a process letting U.S. businesses get relief from tariffs on Chinese goods imposed by Trump.
Rouse suggested that larger considerations than inflation and the current economic recovery remain at play.
“Trade policy is a much bigger issue and that needs to be worked out in the context of our global partners and as part of having a really well-running and efficient global economy,” she said.