Since President Joe Biden was inaugurated at the beginning of the year, most of his administration has been focused on dealing with the ramifications and recovery of COVID-19.
As the pandemic did take over the world, it’s understandable that Biden’s government has been focusing its efforts on recuperating from those losses. But it put America’s economic recovery on the backburner, and Donald Trump’s tariff policies have largely remained untouched.
Trump began heavily imposing tariffs on Chinese goods in 2018, on the basis that China was using unfair trade practices to obtain American technology. That resulted in tariffs of up to 25% on an annual average of $360 billion in Chinese imports. The Biden administration has left this policy in place, causing American businesses and consumers to struggle.
Why are Americans struggling? The tariffs are supposed to be tough on China, right? Nope! The tariffs are actually causing the most financial strain for U.S.-based importers who have paid roughly 90% of the total amount.
Even worse, companies who had applied for and received the tax exclusion are no longer exempt from tariffs. The Biden administration forced a stop to exemptions, so those corporations are all suffering from less profit, and are struggling to find new suppliers who are outside of China.
But American companies cannot afford to move production out of China. Manufacturing costs would fly through the roof, and it simply does not make economic sense to leave. The tariffs however are hurting companies and consumers, as importers have to choose between absorbing the costs themselves or forcing their consumers to pay higher prices.