While he campaigned as the antithesis of former President Trump, President Biden has endorsed some of his ideas, notably tariffs.
Last November, Biden eased some trade tariffs on the EU, but the restrictions remain above a specific threshold. Despite significant price and supply chain constraints, Biden kept nearly all of Trump’s China tariffs.
American Action Forum data and policy expert Tom Lee says tariffs are a major issue. “Tariffs have costs that outweigh the advantages.”
Estimates and Figures
AAF estimates that Trump’s tariffs affect over $350 billion in imports and exports, raising consumer expenses by $51 billion annually.
Tariffs on one sector or good affect all industries that use that product; the rising prices tend to be passed on to the consumers.
Worse, when countries are hit with tariffs, they frequently respond with their own, adding to the slog.
Ford said he’d get Trump’s steel and aluminum tariffs lifted — didn’t
Now he’s mismanaged skilled trades training and needs to beg Americans to work on Ontario projects
We need better than a premier who alternates between bluster and incompetent
— Tom Parkin (@TomPark1n) March 20, 2022
Why keep them? A significant voting group in any presidential election, the midwest is the main focus of Biden’s worker-centric trade strategy.
Despite the economic harm caused by tariffs, Biden shows no sign of reducing them soon. A June White House supply chain study recommended higher taxes on neodymium magnets, for example, used in electric engines and hard disk drives.
“Biden is a protectionist like Trump,” Lee remarked. This is not what Biden said during his campaign, though.
Afraid of losing the remaining tariffs, which Trump pledged to keep until China bought more American goods, Biden indicated he would not remove them for the same reason as Trump.
“I’d like to say they’re fulfilling some of their obligations and lift some of it, but not yet,” he said. Lifting tariffs will help reduce inflation, but only slightly, says Tax Foundation federal tax economist Alex Durante.
Not a Boost
“Biden chose to keep the tariffs to appear to benefit the manufacturing sector,” he stated. “Yet, the evidence shows tariffs haven’t boosted manufacturing.”
U.S. manufacturers blame Trump-era tariffs for inflation's rise https://t.co/W8RaFeVNBV
— JAKsbak (@JKsbak) March 16, 2022
The Tax Foundation concluded that tariffs harm American manufacturing, even when there is no retaliation.
Despite this, US presidents have historically imposed tariffs. Bush implemented steel tariffs, while Obama imposed Chinese tire duties.
Durante added that Trump’s tariffs were bigger, but not fundamentally different.
“Most presidents have implemented tariffs, almost always against their economic experts’ views,” he noted.
With prices going up and China vowing to lock its market via COVID-19-related shutdowns, tariffs could add to the economy’s woes.
In 2020, personal protection equipment became a hot item, and countries sought to keep domestic supplies domestic.
Durante contends that a supply shortage can occur whenever demand increases, regardless of whether the product is made domestically or abroad.
“Resilience and variety are key in supply chains,” Durante remarked. “Making things in America would be very vulnerable to supply shocks if it’s impractical and expensive.”