Corporate giants want the Biden administration to scrap Trump-era tariffs to lower the price of common products. We’ll also look at GOP lawmakers’ criticism of Treasury Secretary Janet Yellen, record gas prices and port problems that could worsen supply chain disruptions.
But first, see what Tuesday night’s elections mean for the November midterms.
Welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. For The Hill, we’re Sylvan Lane, Aris Folley and Karl Evers-Hillstrom. Someone forward you this newsletter? Subscribe here.
Business lobby presses Biden to nix China tariffs
Business groups are aggressively lobbying President Biden to undo tariffs on hundreds of billions of dollars’ worth of Chinese imports, arguing that doing so would help ease inflation.
They say that lifting those tariffs would lower the costs Americans pay for an array of common products, including clothing items, sunscreen, soap, furniture, appliances, bicycles and consumer electronics.
“All the options need to be on the table to help address inflation, and this is the quickest and easiest one that we can take right now,” said Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation.
- The inflationary environment is creating the best chance yet for business lobbyists to convince Biden to lessen or outright ax China tariffs first imposed by the Trump administration in 2018 and 2019.
- Several Biden administration officials, including Commerce Secretary Gina Raimondo, have said that the president is considering lifting tariffs on popular household items.
- Lobbyists are citing a study showing that removing all of Trump’s China tariffs would lower inflation by less than 0.3 percent in the near term, but the total impact could reach 1 percent in the long run, a modest decrease either way.
However: Inside the Biden administration, some high-ranking officials, including U.S. Trade Representative Katherine Tai, aren’t so sure that lifting tariffs will have much of an immediate impact on inflation but could hurt U.S. trade negotiations with Beijing. Labor unions with close ties to the president have also made it known that they want the tariffs to stay.
Karl has more here.
YELLING AT YELLEN
GOP rips Yellen after botched predictions on inflation
Congressional Republicans breathed fire at Treasury Secretary Janet Yellen this week during testimony in front of both the Senate Finance Committee and the House Ways and Means Committee over soaring inflation that has hit near 40-year highs in the wake of the coronavirus pandemic.
The former Federal Reserve chair admitted last month she’d been wrong on inflation, which could remain at elevated levels into 2023.
“Is there a risk of inflation? You responded, ‘I think there’s a small risk,’” Sen. John Barrasso (R-Wyo.) said to Yellen during a meeting of the Senate Finance Committee, referring to comments she made early last year.
- Republicans argued that Democratic stimulus packages like the American Rescue Plan, which extended stimulus measures enacted during the Trump administration, were driven by the administration’s misunderstanding of the risk of inflation.
- They often cite a study from the San Francisco branch of the Federal Reserve that additional stimulus may have raised inflation by about 3 percentage points by the end of 2021.
Tobias Burns has more here.
PAIN AT THE PUMP
National gas price average nears $5 per gallon
The national average price for a gallon of gas neared $5 on Wednesday, according to AAA.
After weeks of soaring gas prices, Wednesday’s numbers showed the national average at $4.955.
Several states, including Nevada, Arizona and Illinois, saw average prices significantly higher than $5 per gallon. In California, which had the highest price among all 50 states, the average price per gallon of gas climbed to $6.39 on Wednesday.
Monique Beals has more here.
PORT PROBLEMS
Business groups urge Biden to help resolve labor dispute at West Coast ports
Retail, footwear and travel goods groups on Wednesday urged President Biden to facilitate a contract agreement between West Coast dockworkers and maritime shipping companies to prevent further port disruptions.
The current contract between shippers and 22,000 West Coast port workers represented by the International Longshore and Warehouse Union is set to expire July 1, setting the stage for a potential work stoppage that would ravage the nation’s fragile supply chains.
- West Coast ports are gearing up for a busy summer, particularly with a massive number of ships that were stranded outside of Shanghai during China’s COVID-19 lockdowns returning to the U.S.
- They’ve already struggled to accommodate a surge in demand for imported goods this year amid staffing shortages, creating bottlenecks at U.S. ports that drive up costs for consumers.
Karl has more here.
Good to Know
Democrats are growing increasingly frustrated by what they say is a flat-footed White House that is slow to catch up on solving a seemingly never-ending cascade of problems in the face of an unrelenting news cycle.
They point to the recent baby formula shortage as the latest example of how President Biden has failed to get ahead of the story, allowing Republicans to set the narrative as yet another failure for the White House. But they also highlighted Biden’s lag on other issues at the top of voter’s minds: Inflation and gas prices.
Here’s what else we have our eye on:
- The Senate on Wednesday voted against President Biden’s nominee for an assistant secretary post for the Labor Department, with Vice President Harris in Los Angeles and unable to cast a tiebreaking vote.
- Bipartisan sponsors of a key antitrust bill in the House and Senate on Wednesday urged leadership in both chambers to call floor votes in June on the proposal targeting tech giants.
- Microsoft announced on Wednesday that it would scale back on its business operations in Russia amid Moscow’s continued invasion of Ukraine.
That’s it for today. Thanks for reading and check out The Hill’s Finance page for the latest news and coverage. We’ll see you tomorrow.