If “fairness” is the central principle guiding the Biden administration’s trade policies, you wouldn’t know it by looking at what has been done — or, rather, hasn’t been done — over the past 18 years. month.
Yet that is what US Trade Representative Katherine Tai claims. In a tweet On Wednesday, Tai wrote that Biden was taking a “whole-of-government approach to advancing equity.”
“Equity is also at the heart of our trade and economic strategy to create sustainable and equitably shared growth,” she added. wrote. “Addressing the challenges faced by communities of color is central to this strategy.”
If it was just a big bunch of progressive pablum, it would be pretty easy to ignore. But it is also objectively inaccurate. If “fairness” was the Biden administration’s primary concern, it would have long since eliminated tariffs imposed by former President Donald Trump on steel, aluminum and thousands of other products. These tariffs are nothing more than taxes, and taxes that hit hardest those who can least afford to pay them.
And if the Biden administration really cared about fairness, it wouldn’t have stopped there. As research from the Progressive Policy Institute (PPI), a left-wing think tank, has shown, tariffs of all kinds are regressive taxes that increase costs for consumers and make it especially difficult for poorer households to access to basic products.
The elimination of many wasteful tariffs “would ease financial burdens in a small but real way for low-income and minority American workers and their families, helping to raise their standard of living without intensifying the competitive pressure,” Ed Gresser, PPI vice president and director of global trade and markets, wrote in a report released in April.
Trump’s tariffs have contributed to inflation and helped artificially inflate the cost of everything from appliances to housing. About two-thirds of all imports from China are now subject to tariffs when entering the United States, with the average tariff being 19.3%. That’s six times the average tariff on imports made in China before the start of Trump’s random trade war. It certainly does not help the poorest Americans improve their standard of living.
But, as Gresser points out, other aspects of the US tariff code are also responsible for imposing regressive taxes on the poorest Americans. Under the “most favored nation” (MFN) tariff system applied to imports from countries with which the United States does not have a specific trade agreement, many everyday consumer goods are subject to higher customs duties than their luxury alternatives. Stainless steel spoons are priced at a much higher rate than much more expensive sterling silver spoons, for example, and cheap sneakers are priced at a rate more than five times higher than leather dress shoes.
“This bias,” writes Gresser, means that the U.S. tariff system is not only “regressive, but actually discriminates against the poor.”
For months, we’ve been treated to headlines promising that the Biden administration is considering lifting Trump’s tariffs. In June, administration officials said The New York Times that lifting tariffs could reduce inflation by a quarter of a percentage point, although independent studies have suggested the effect could be greater. Yet nothing was done, even after Biden promised that controlling inflation was his “top national priority”.
When Biden took action on tariffs, he stuck to Trump’s strategy. Tariffs on solar panels and their components that were due to expire this year were extended by a Biden executive order issued in February. This is despite the fact that Biden’s solar panel tariffs will make it harder for the country to meet Biden’s climate goals.
Today, Tai says fairness is at the heart of US trade policy. Hopefully, this signals a coming tidal wave of trade liberalization and tariff reductions that would give poorer American households easier access to essentials.
However, with the Biden administration’s track record on trade, it’s more likely to be a bunch of cheap talk that will be followed by a disappointing lack of action.