MNI INTERVIEW: US Seen Holding China Tariffs High- Ex-Official

U.S. tariffs on Chinese goods will stay high and probably move even higher regardless of the outcome of elections this year, William Reinsch, a former under secretary of commerce for export administration, told MNI.

"They stay or they go up. With the Democrats they go up selectively. With Trump they go up across the board," he said. The U.S. political consensus has shifted against free trade but with Donald Trump you are likely to see increased tariffs on day one, whereas under Kamala Harris there would be increases in targeted areas that come much later into a potential administration, Reinsch said.

The Trump administration imposed tariffs on thousands of products valued at approximately USD380 billion in 2018 and 2019. The Biden administration has kept most of the Trump administration tariffs in place, and in May 2024, announced tariff hikes on an additional USD18 billion of Chinese goods, including semiconductors and electric vehicles.

Those tariff rates are unlikely to come down, regardless of the election results in November. "There's no politically adroit way to get rid of them," said Reinsch, who served as a member of the U.S.-China Economic and Security Review Commission from 2001 to 2016.

Candidate Trump has proposed significant tariff hikes as part of his presidential campaign, including a 10% universal baseline tariff on all imports, a 60% tariff on imports from China, imposing “reciprocal” tariff rates on imports equal to the rates trading partners impose on U.S. exports of the same product, and tariffs on certain autos from Mexico and possibly from the European Union.

Trump has also proposed revoking Permanent Normal Trade Relations status for China, that would result in the increase in the effective tariff rate of around 40 percentage points. Reinsch said Trump would also go after countries that have benefited from tariff increases during his first administration, like Vietnam.

SUTBLE DIFFERENCES

Compared to Biden, Harris' policies on trade are likely to be "more of the same," said Reinsch, a former Capitol Hill staffer now at the Center for Strategic and International Studies. "But being from California, a big pro-trade state with high-tech, agriculture, specialty crops, she probably has a better appreciation than the rest of the Biden folks do about the value of exports." The Democratic National Platform released earlier this week had no mention of the value of exports.

Organized labor groups have pushed Democrats toward more protectionist policies but Reinsch noted that Biden's base and Harris' base are not the same, which could lead to subtle differences on trade.

"Biden was interested in growing domestic manufacturing and supporting old-line heavy industries," he said. Harris is "tougher on climate and voted against the USMCA because it didn't do enough on climate."

A number of prominent former policymakers have said there is a risk that a tariff-driven uplift to U.S. inflation could keep the Fed on hold in 2025. (See: MNI INTERVIEW: Trump Win Would Risk Ending Fed Cuts - Rosengren)

Harris has turned Trump's proposals to increase tariffs into a cost-of-living issue on the campaign trail and she would likely place greater emphasis on climate change but keep high tariffs in place, Reinsch said. When it comes to China, "Harris would likely study the problem for years and leave tariffs there."