Eliminating tariffs imposed on goods during the worst of the trade war would help ease inflation in the U.S., former Treasury Secretary Jacob Lew told CNBC on Tuesday.But there’s currently “no political space” to do so, he said on CNBC’s “Street Signs Asia.”
“I think that the United States and China have deep differences. I’ve never thought it should just be about negotiating the exchange of one good or another on one side or the other. It should be about a level playing field,” Lew said. He served as treasury secretary from 2013 to 2017 during the Obama administration.
He continued: “I’ve thought from the beginning that the tariffs were an ineffective way to deal with their attacks on American consumers. And right now, with inflation being an issue, rolling back tariffs would actually reduce inflation in the United States.”
Relations between Washington and Beijing took a turn for the worse in 2018, when the Trump administration imposed tariffs on billions of dollars worth of Chinese goods and Beijing retaliated with similar punitive measures, drawing both sides into a protracted trade war.
U.S. tariffs on Chinese goods stood at an average of 19.3% on a trade-weighted basis in early 2021, while Chinese tariffs on American products were at about 20.7%, according to data compiled by think tank Peterson Institute for International Economics earlier this year.
Before the trade war, U.S. tariffs on Chinese goods were on average 3.1% in early 2018 while China’s tariffs on American goods were at 8%, the data showed.
Referring to rolling back tariffs, Lew said: “Both the leaders have to, I think, create political space in our two countries for these issues to be issues where you can move and make progress, because otherwise we either stay where we are. It gets worse. I think we can do better.” READ MORE...
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