Biden faces growing pressure to nix Trump's tariffs on China as inflation keeps raging

• Biden faces growing pressure to nix some of Trump's tariffs on China.
• Economists argue removing tariffs would yield relief for Americans during a punishing stretch of inflation.
• "Even if it is a small effect, it's an effect in the right direction and it's worth doing," an ex-Treasury official said.

President Joe Biden and his fellow Democrats are struggling to keep inflation at bay, now at its highest level in four decades. It's posing an immense political threat to the party in the November midterms as voters grow sour on the state of the economy.

Yet there is one big step that economists say the Biden administration can take to make progress on reducing the cost of everyday products ranging from televisions to clothes: Nixing former President Donald Trump's tariffs on China. 

"There are things we can do and one of them is certainly lowering tariffs," Kimberly Clausing, an economics professor at the University of California Los Angeles and former senior tax advisor to the Biden administration, said in an interview.  "Even if it is a small effect, it's an effect in the right direction and it's worth doing."

"I have been surprised that they haven't gone to these already," Douglas Holtz-Eakin, a former economic advisor to President George W. Bush, told Insider. "They're getting a lot of political heat for the other things they've contemplated — gas tax holidays are tiny by comparison and less effective. So this is this is where I would go if I were them."

Some Democrats in Congress are expressing the same views. "The tariffs were neither well thought out nor well executed," Sen. Tim Kaine of Virginia wrote in a recent op-ed published in The Virginian Pilot, calling them "direct taxes on American households" and urging they get rolled back.

The White House did not respond to a request for comment.

Eliminating many of the tariffs would likely yield a financial boost to increasingly cash-strapped households. A March analysis from the Peterson Institute of International Economics indicated that rolling back the tariffs would save Americans an estimated $797 annually — or just over half a 2021 stimulus check. 

Trump's tariffs have caused "collateral damage"

The tariffs have been locked in since 2018. At the time, President Trump imposed taxes on certain imports from China in an effort to slash the trade deficit and pressure the Chinese government to ditch unfair trading practices and level the playing field for American companies.  Those were later expanded to encompass roughly two-thirds of all Chinese imports like microchips and bicycles with some levies reaching 25%.

But they have done little to shrink the enormous trade gap with China. Through the first five months of 2022, the US imported $163 billion more in goods than it exported to China, per the Census Bureau.

"My view is that they have not achieved their objectives and they've created some collateral damage," Clausing said. "We didn't succeed in getting more of our goods into the Chinese market. We didn't succeed in changing the underlying practices, which weren't really closely tied to the tariffs in the first place."

Business leaders are pushing the Biden administration to remove the tariffs. A recent Beer Institute letter from major brewery executives called on the White House to lift aluminum tariffs that cost the industry an estimated $1.4 billion since 2018. 

But the White House doesn't appear sold yet. It risks political blowback from constituencies like labor unions, which strongly favor keeping the tariffs in place. "We have this tension between what would be effective and what sells on Main Street," Clausing said. "I think that's tricky to manage."

It's unlikely that the Biden administration will lift most of the tariffs before the November midterms. There's little sign the White House is close to a decision after months of internal deliberations as well. "I haven't made that decision yet," Biden told reporters on Friday.