US Treasury Secretary Janet Yellen said on Thursday that lowering Trump-era tariffs on imported goods from China could help ease some inflationary pressures, but stressed that it will not be a game changer.
She believes that the 25% tariffs put up on imported Chinese goods are the reason why prices are soaring in the United States.
The previous product-specific exemptions from tariffs on Chinese goods expired in late 2020, but US Trade Representative Katherine Tai launched a new exemption process in early 2020as part of her engagement with Chinese officials on the signed Phase 1 trade agreement.
Yellen also mentioned the elimination process the Biden administration is working on to alleviate price pressures. It included working with ports and private companies to unblock supply chains and keep products flowing to consumers.
"These are the places where tariff cuts need to be made," Yellen said. "I think that could be helpful," she added.
Yellen also noted that personal consumption could make a big contribution in alleviating global imbalances, so that is exactly what they discussed and will continue to discuss.
On currencies, the Treasury secretary said she has no opinion on whether the Federal Reserve should create a digital version of the dollar, but reminded that such a move would require broad consensus between Congress, the US central bank and the White House. She added that the advantages and disadvantages of a central bank digital currency need further study, including its impact on the banking system.
Recently, Fed Governor Lael Brainard called for the faster development of the digital dollar as China and other countries are already developing their own digital currencies.
But Yellen said the issue had not been seriously discussed in the White House, not to mention the Congress still have to weigh it up.