The National Retail Federation (NRF) on Wednesday urged President Biden to reduce or eliminate tariffs on Chinese goods as a way to help combat red-hot inflation.
The lobbying group claimed that lifting tariffs that were first imposed by the Trump administration could reduce consumer prices by as much as 1.3 percent.
“Consumers and businesses continue to feel the pain of higher prices across the board from everyday goods and services to rent and groceries and gas,” NRF President Matthew Shay wrote in a letter to Biden. “Removing the harmful China 301 tariff will alleviate some of the inflationary pressure on the U.S. economy.”
The NRF, which represents thousands of retailers, including Walmart and Target, noted that American importers have paid $136.5 billion on tariffs stemming from the U.S.-China trade war, costs that are largely passed onto American consumers.
Consumer prices rose 8.3 percent over the past 12 months ending in April, according to Labor Department data, with the price of gas, food, automobiles and other products skyrocketing.
The letter comes as Biden administration officials debate whether to provide tariff relief to consumers who are feeling the effects of 40-year high inflation.
Treasury Secretary Janet Yellen told reporters on Wednesday that the Section 301 tariffs “impose more harm on consumers and businesses” and “aren’t very strategic in the sense of addressing real issues” with China.
U.S. Trade Representative Katherine Tai, who has defended tariffs on China as a way to combat what the U.S. sees as unfair trade practices, said earlier this month that reducing tariffs is a potential option to lower consumer prices.
In his letter, Shay also warned that the Federal Reserve’s decision to raise interest rates and reduce its balance sheet to fight inflation could “further hurt businesses, workers and consumers.”
“Overly broad action by the Fed alone could inflict significant and lasting damage to consumers,” he wrote. “Providing tariff relief now can alleviate inflation pressures in the economy and provide targeted relief to consumers until the Fed’s job is done.”