Hawley Warns Against Biden Cutting U.S. Tariffs on China

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    Recently, several \Biden staffers have proposed that the Biden administration reduce Section 302 U.S. tariffs on China-made products. Treasury Department Secretary Janet Yellen, for instance, said earlier this month that cutting U.S. tariffs on China is “worth considering.”

    “There would be some desirable effects,” Yellen stated. “It's something we're looking at.”

    Hawley, in a letter addressed to the U.S. Trade Representative (USTR) Katherine Tai, urges the Biden administration to rescind this “misguided policy proposal” noting that tariffs were designed in order to “level the playing field for American workers and communities which have long suffered from unfair practices perpetrated by China after its accession to the World Trade Organization in 2001.”

    Hawley writes:

    “I am concerned about recent remarks made by Biden Administration officials that indicate an intention to cut tariffs on imports of goods from China. I ask you to reject this erroneous policy idea. I also write inquiring about the progress of a forthcoming Section 301 investigation into the illegal economic practices employed by China's Chinese Communist Party, which hurt American industry and workers. These practices should be fought with all the force and support of the office.”

    Tariffs on Chinese products enjoy wide support from the American populace. However, certain officials in the Biden Administration seem to oppose the tariffs and have, recently, suggested that they be eliminated. The Deputy National Security Adviser Daleep Singh has said that tariffs on goods for consumers made by China “serve no strategic purpose.” Additionally, Treasury Secretary Janet Yellen has been a vocal opponent of tariffs being used to balance our trade relationship with China and has suggested that the possibility of reducing tariffs on Chinese products could be “worth considering.”

    “Tariffs on Chinese products are a crucial tool that our nation should use in an overall strategy for geoeconomic rivalry with China. I would therefore encourage you in the strongest terms to exercise leverage within Biden's administration to reject the narrow-minded position pushed by colleagues. You had already told Congress earlier in the year, increasing tariffs will lose leverage at the negotiation table with China. This leverage is one you have to be able to maintain and fully use and utilize, particularly following China's failure to respect the purchase agreements it signed as part of the Phase One trade deal. The decision to cut tariffs now is a blunder in strategy. It will not only give a monetary reward to China for its latest deceit, it would also give them the green light to repeat it later on.”

    Additionally, Hawley requests the Biden administration quickly open a Section 301 investigation into China's trade practices within China's U.S. market, which includes “state-directed industrial subsidies in strategically important sectors which unfairly benefit Chinese firms and degrade their American competitors.”

    “The possibility of such an investigation has been reported since at least September 2021,” Hawley writes. “However, as of yet, your office has failed to act. This is unacceptable. The longer you wait to investigate and address these practices, the more damage will be done to American workers and industry. You must act with haste.”

    In the past, it is known that the Biden administration has slashed U.S. tariffs on more than 350 Chinese-made goods which is a huge victory for multinational companies that have for a long time outsourced manufacturing to China.

    Between 2001 and 2018, U.S. free trade with China ended 3.7 million American jobs from the American economy — 2.8 million of them eliminated from American manufacturing. In the same time frame, around fifty thousand American manufacturing facilities shut down.

    Within one West Virginia town, 94 percent of jobs were transferred overseas due to trade agreements that allow free trade such as the North American Free Trade Agreement (NAFTA).

    Huge job losses have occurred with a growing U.S.-China trade gap. In 1985, prior to when China joined the WTO as a member, there was a U.S. trade deficit with China of $6 billion. In 2019, China was the largest market for U.S. trade, and the deficit with China was more than $345 billion.

    A study conducted in 2019 showed that an indefinite U.S. tariff of 25 percent on all Chinese imports could create more than 1 million American jobs over the next five years. American manufacturing is essential in our U.S. economy, as each manufacturing job creates another 7.4 American jobs in other sectors.

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