Supply chain: Pressure is growing on Biden to lift Trump’s tariffs as

On Oct 4, 2021

Trump put tariffs on roughly $350 billion of Chinese-made goods — and despite the change in administrations, those duties remain in place. American importers have paid more than $106 billion to cover the cost of those levies to date, and many of them are now facing skyrocketing shipping costs.

While the Biden administration has been conducting a comprehensive review of the US-China trade policy, it has said little about restarting trade talks or lifting punitive duties.

Now the pressure on the Biden administration to address the issue is ramping up, as supply chain problems are getting worse — resulting in shortages and higher prices for everything from sneakers to furniture to cars.

“Tariff relief is a fast and easy way to help companies hurt most by the shipping crisis stay in business and keep people employed,” said Steve Lamar, president and CEO of the American Association of Apparel and Footwear.

The trade association sent a letter to the office of the US Trade Representative last week imploring the administration to provide relief from the tariffs. It was followed by a similar request from four major manufacturing associations, acknowledging that the supply chain disruptions will require long-term fixes, but argue that tariff removal could provide some immediate relief.

The supply chain problems, compounded with the trade distortions created by the duties “are hurting the competitiveness of US manufacturers and stalling the US economic recovery,” the groups wrote.

Tariffs are in place indefinitely

At a minimum, US importers are urging the Biden administration to reinstate exemptions some of them received since 2018. When the duties were first put in place, companies could apply for waivers that were generally granted for items that could not be bought from a US manufacturer or somewhere else outside of China.

Some of those exemptions have been extended, like those for personal protective equipment in high demand due to the pandemic, but many others have expired.

There are currently tariffs on the majority of goods being shipped from China into the United States, including items like baseball hats, luggage, bicycles, TVs, sneakers and a variety of materials used by American manufacturers. The average rate is 19% — more than six times higher than before the trade war began in 2018, according to the Peterson Institute for International Economics. Importers pay those tariffs and generally pass along some or all of the increased cost to consumers.

Trump used tariffs as leverage, meant to hurt China’s economy and pressure Beijing to agree to a new trade deal that addresses unfair trade practices, such as intellectual property theft and forced technology transfers. He and Chinese President Xi Jinping reached what they called a Phase One agreement in early 2020. Some of those issues were addressed, but things like subsidies and state-owned enterprises were left untouched. The agreement also reduced the rate of some of the tariffs, but left…