Joe Biden ‘cautious’ on China tariffs after Nancy Pelosi’s Taiwan trip, US commerce chief says

• Gina Raimondo says the controversial visit has made geopolitics with Beijing ‘particularly complicated’
• US officials are eager not to do anything that could be viewed as escalating the situation, but also don’t want to be seen as retreating, insiders say

US House Speaker Nancy Pelosi’s visit to Taiwan has made geopolitics with China “particularly complicated” as President Joe Biden weighs the future of tariffs on more than US$300 billion in goods from the US rival, according to his commerce chief.

“Certainly, it has made it a little more challenging,” Gina Raimondo said in an interview on Bloomberg Television’s Balance of Power With David Westin on Wednesday.

“It’s harder, but I am hopeful that we will get beyond that and get back to a place where we can have more of those discussions.”

Biden is considering what to do with the Trump-era tariffs and is weighing his options, Raimondo said. He is “very cautious” and does not want to do anything that would hurt American workers, she said.

“But I know he’s looking at it. We’ve talked about it again recently, and I expect he’ll be making a decision before too long.”

Meanwhile, China’s war games around Taiwan have led Biden administration officials to recalibrate their thinking on whether to scrap some tariffs or potentially impose others on Beijing, setting those options aside for now, according to sources familiar with the deliberations.

Pelosi visited Taipei, Taiwan, last week in the face of threats and opposition from China, which regards Taiwan as part of its territory. She was the highest-ranking US politician to visit the island in 25 years, and Chinese officials called it “provocative”.

China’s military for days took part in ballistic missile launches and simulated attacks on the self-ruled island of Taiwan that China claims as its own.

Biden administration officials are eager not to do anything that could be viewed by China as an escalation while also seeking to avoid being seen as retreating in the face of the communist country’s aggression, Reuters reported.

“I think Taiwan has changed everything,” said one source familiar with the latest developments in the process, details of which have not been previously reported.

A senior administration official made clear Biden had not reached a decision.

“The president had not made a decision before events in the Taiwan Strait and has still not made a decision, period. All options remain on the table,” the official said. “The only person who will make the decision is the president – and he will do so based on what is in our interests.”

Former president Donald Trump imposed tariffs on more than US$300 billion in Chinese imports from 2018 after an investigation concluded China stole intellectual property from American companies and forced them to transfer technology.

The duties covered goods including industrial inputs such as microchips and chemicals, and consumer merchandise such as apparel and furniture.

While there’s been no direct indication of which duties may be removed, senior administration officials have said reducing tariffs on household items could help ease a surge in the US cost of living.

Soaring inflation has eroded support for the Biden administration in public surveys, endangering Democratic fortunes in November’s midterm congressional elections.
Multiple factors, in addition to China’s Taiwan response, have complicated the administration’s deliberations.

As US officials considered getting rid of some of the tariffs, they sought reciprocal rollbacks from Beijing and were rebuffed, two sources said. A spokesperson for the Chinese embassy in Washington could not immediately be reached for comment.

One of the sources, who said a unilateral removal of some US tariffs on Chinese imports has been put on hold, said this was done in part because China failed to show any willingness to take reciprocal actions or meet its phase one trade deal commitments.

That deal, reached at the end of 2019 with the Trump administration, required China to increase its purchases of US farm and manufactured goods, energy and services by US$200 billion in 2020 and 2021 over 2017 levels. China fell well short of these commitments.

Author: Agencies, SCMP