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Could easing tariffs help curb inflation? Supply chain expert weighs in

Joe Biden
Posted at 6:28 AM, Jul 07, 2022

PHOENIX — In an effort to curb inflation, President Joe Biden is considering easing tariffs on China. But could that make a noticeable difference?

Toys, clothing and accessories are just some of the millions of products shipped into the U.S. from China every year.

Hitendra Chaturvedi teaches supply chain management at the W.P. Carey School of Business at ASU. He says those products end up costing the consumer more, because of the tax put on them to ship them.

In 2019, Trump imposed a 15% tax on over 100 billion products from China.

Chaturvedi says if that was removed, you could expect to see the price of some products go down.

"You can just take the percentage that has been put on the product in a very simplistic way and take that off from the price of the product... assuming nobody in the middle pockets that money," he said.

Economists estimate removing some tariffs could bring inflation down anywhere between .3 - 2%.

But Chaturvedi says more still needs to be done before consumers see any major changes.

"Which includes interest rates, which includes having negotiations with our supply partners to ensure enough supply is coming in. It includes making US manufacturing more competitive and it includes bringing down the cost of supply chain and all of those things," he said. "It has to be looked at as a toolbox of things that we can do. People who say, oh tariffs are not going to help. On their own, maybe they'll have limited impact. But using it as a toolbox and doing things I absolutely believe they can help."

The White House has said no decision has been made yet, but they are looking into options.