At the NRF Supply Chain 360 conference and expo, attendees explored the modes and methods needed to build a stronger, more sustainable supply chain and ensure resiliency in challenging times. Learn more about the conference, held June 20-21, 2022, in Cleveland, here.
Join NRF in calling on Congress to lower inflation now.
As we continue to face the highest rate of inflation in decades, the Biden administration should be looking at all options to provide relief to help U.S. businesses, workers and consumers. While there is no single reason why we are facing such inflation, there is also no single solution that will provide the necessary relief to the economy. We need a mix of economic and monetary policy solutions to tame inflation and the impact it is having on the economy.
One solution that most certainly needs to be on the table is providing relief from the harmful Section 301 tariffs on goods from China. As most would agree, these tariffs, many of them in effect since 2018, have not achieved their desired goal of pressuring China to change its trade policies. While China has been a bad actor and we need to address key issues such as forced technology transfers and China’s failure to protect intellectual property rights of U.S. companies, tariffs were never the right approach.
From the beginning, NRF and many others pointed out the negative effect the tariffs would have on retailers, workers, consumers and the economy as a whole.
Tariffs are a tax that is paid by the importer. Despite what some claim, these tariffs have not been paid by China. To date, U.S. Customs and Border Protection has collected almost $136.5 billion from U.S. importers since the tariffs went into effect. As the Federal Reserve Bank of New York recently pointed out, these tariffs “continue to be almost entirely borne by U.S. firms and consumers.”
According to a recent Moody’s Investor Service report, the tariffs “hit American businesses and consumers hardest,” with China absorbing only 7.6 percent of the tariffs “while the rest of the tab was picked up by Americans.”
Businesses large and small have talked about the negative impact of the tariffs since they were put in place. The tariffs, which are applied to everything from parts and materials to finished goods, have only resulted in increased costs that ultimately get passed along to the end consumer. The Congressional Budget Office estimated that the tariffs cost the average American household more than $1,200 in 2020.
Imagine what removing these harmful tariffs would do to help boost the economy and address some of the inflationary pressure being felt by Americans. Several key administration officials including Treasury Secretary Janet Yellen, Deputy National Security Advisory Daleep Singh and White House Press Secretary Jen Psaki all recently commented that the tariffs serve no strategic purpose and could be lowered. In addition, we’ve seen 141 bipartisan House members and 41 bipartisan senators write to U.S. Trade Representative Katherine Tai urging her office to open a broader tariff exclusions process to provide further relief.
As Ed Gresser from the Progressive Policy Institute recently wrote, “Tariffs are easily the most regressive of all U.S. taxes, forcing the poor to pay more than anyone else.” The Peterson Institute also released a new study talking about how trade liberalization, including tariff relief, can help stem inflation. In addition, the Cato Institute has also called for tariff relief to tame inflation.
We strongly agree and believe now is the time to act. Join the NRF Lower Inflation Now campaign.