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May 23, 2022, 7:56 a.m. EDT

Biden says reducing tariffs on China is under consideration, weighs asking OPEC to pump more oil

By MarketWatch

U.S. President Joe Biden said Monday he was weighing cutting tariffs on Chinese goods while increasing calls on OPEC to raise oil production as he grappled with a politically damaging wave of inflation.

“I am considering it. We did not impose any of those tariffs. They were imposed by the last administration, and they’re under consideration,” Biden said on reducing tariffs on China.

He made the comments during a news conference with Japanese Prime Minister Fumio Kishida, Reuters reported.

Biden’s comments fueled a rally in the offshore yuan (XTUP:USDCNY) , Bloomberg reported.

See also: U.S. and 12 countries join new Indo-Pacific trade pact

Biden said he would talk with U.S. Treasury Secretary Janet Yellen about tariffs on Chinese imports after returning from Asia.

The offshore yuan jumped as much as 0.7% in reaction and reached the strongest level since May 5. That came after a 1.5% rise last week in response to easing lockdowns in Shanghai and stronger sentiment due to a reduction in a key lending   interest rate on Friday by Chinese banks.

The U.S. imposed tariffs on more than $300 billion in imports from China after a U.S. investigation concluded China stole intellectual property from American companies and forced them to transfer technology. China then responded with its own taxes on imports. 

A rollback of U.S. tariffs would be positive for China’s exports, but supply chain disruptions and factory shutdowns due to the COVID-zero policy in China could significantly limit the benefits from any potential reductions, economists including Aichi Amemiya at Nomura Securities International wrote in a note last week. 

The Biden administration has maintained most of the tariffs imposed by his predecessor, Donald Trump. However, with U.S. inflation running at the hottest pace in four decades, the president has come under pressure from some economists and lawmakers and the U.S. Chamber of Commerce to reduce or eliminate the tariffs. 

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