U.S. Treasury Secretary Janet Yellen said Wednesday that cutting import tariffs on Chinese goods is not a cure for the high inflation bedeviling U.S. consumers.
President Joe Biden said last month during his trip to Asia that he was weighing cutting tariffs that were imposed by the Trump administration.
Since inflation started to stir last year, many economists have been urging the Biden administration to lower the trade tariffs. A study by the Peterson Institute for International Economics estimated that repeal of tariffs on China
could reduce inflation by 1.3 percentage points.
During a House Ways and Means Committee hearing, Yellen was asked by Rep. Stephanie Murphy, Democrat of Florida, if a reduction in tariffs on Chinese products would bring down inflation.
“I think some reductions may be warranted and could help to bring down the prices of things that people buy that are burdensome,” Yellen said.
“I want to make clear, I honestly don’t think tariff policy is a panacea with respect to inflation,” she added.
The Treasury Secretary noted that spending on goods account for only a third of consumption.