As Americans continue to get vaccinated, the U.S. economy is similarly continuing its gradual ascension from the low points it fell to during the worst phases of the COVID-19 pandemic. The progress is promising, but there are still some bumps in the road we’ll need to be careful to avoid in order to have as full a recovery as possible.
It’s important that President Joe Biden and the leaders in his administration continue to look for ways that can remove undue stresses on the economy and put it in the best position to recover as quickly and as robustly as possible. The best place for them to start is with the trade war that the prior administration started in 2018.
Looking for leverage in his trade negotiations with China, former President Donald Trump instituted what is now over $100 billion dollars’ worth of tariffs on more than $350 billion of goods that Americans import from China. He claimed these tariffs would help to bring businesses back to the U.S., create American jobs and position our economy to outcompete China.
Predictably, the tariffs failed. New research confirmed what was already apparent: The former administration’s trade war with China not only failed to accomplish its goals, but it also backfired on the U.S. economy. Since tariffs are taxes that American importers pay to the U.S. government, various materials and goods that businesses need to operate are more expensive, meaning that they need to either absorb the cost of the tariffs or pass them on to consumers.
The longer the trade war goes on, the more difficult those options are for businesses to weigh. They can only protect consumers from the additional costs for so long before companies risk running out of business. In addition, as businesses take on those costs, it is harder for them to grow, create new jobs and invest in their communities, which limits the economy’s potential in the process. These costs are only adding to the ongoing challenge of supply chain disruptions.
Secretary of the Treasury Janet Yellen was correct to say earlier this year that tariffs “hurt American consumers,” and now the Biden administration has a chance to remedy an issue that’s been damaging the American economy since former President Trump launched the trade war more than three years ago.
Rather than consider implementing even more tariffs, as was reported recently, the Biden administration should heed Secretary Yellen’s words and bring the trade war to a swift end. New tariffs won’t help—they will only add to the pain of the American economy. Americans need relief from the trade war and certainly don’t need it to continue, let alone expand.
As the Biden administration reviews its trade strategy with China, it shouldn’t hesitate to lift the tariffs that linger from the prior administration. Doing so would give the American economy a bump exactly when it’s needed most as we work to end the COVID-19 pandemic. Ending the tariffs would also alleviate a key inflationary force as prices slowly continue to climb, helping to mitigate one of the prime threats to our economic recovery.
The path forward for President Biden and United States Trade Representative Katherine Tai should be straightforward: lift the tariffs that have been allowed to remain in effect, and finally close the loop on the self-inflicted harm needlessly imposed by one of the Trump administration’s most misguided policies. American families, workers and businesses will all be better off for it.
Carol Murphy is the deputy democratic leader in the New Jersey General Assembly.
The views expressed in this article are the writer’s own.