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According to Experts, scraping off Additional tariffs on Chinese Imports may reduce Inflation in the U.S.

According to Experts, scraping off Additional tariffs on Chinese Imports may reduce Inflation in the U.S.

According to Experts, scraping off Additional tariffs on Chinese Imports may reduce Inflation in the U.S.

  • 05-Jul-2022 6:20 PM
  • Journalist: Nicholas Seifield

Since last year, the U.S. has struggled with rising prices due to an unexpectedly strong economic recovery from the pandemic shock, fueled by significant amounts of U.S. government spending, including direct checks to households. Due to this, supplies were overstretched, forcing businesses to raise prices. 

Inflation in the U.S. reached its highest level since 1981 last month as prices increased faster than forecasted due to rising energy and food prices. Unfortunately, a shocking set of data made Americans more aware of the depressing reality of decreasing prices in the U.S. Far from reaching its pinnacle, Inflation still appears to be gaining momentum, having significant repercussions for the Federal Reserve, investors, and American politics. 

In April, according to the consumer price index (CPI) report, a number of American economists and bureaucrats claimed that Inflation had peaked and might be about to decline. But as per the data from the U.S. Labor Department, the CPI rose 8.6% from a year earlier in May, marking yet another all-time high for inflation data.

The geopolitical war between Russia and Ukraine has made it more challenging to resolve the issue of Inflation in the U.S., however, as it has increased the cost of oil and other commodities while disrupting shipments from the two nations. The Russia-Ukraine war has expanded worldwide, with Covid-related shutdowns in China this spring playing a big part. "The war is severely hampering growth in Ukraine, Chinese lockdowns, supply-chain disruptions, and the threat of stagflation." said an industry specialist. 

The Trump Administration's trade war strategy with China can only be regarded as one of several significant economic blunders because of its egregious and unacceptable ignorance of how the real world operates. At the same time, one analyst claimed that the former president's trade war with China was economically pointless and did not produce "significant" trade advantages. 

Several business experts have urged the government to remove tariffs on Chinese imports because doing so will eventually reduce U.S. inflation by 1% and boost consumer confidence. Reducing high tariff rates, or the additional taxes levied on more than $370 billion worth of Chinese imports each year, is one way to ease the strain on the American economy and consumers. 

Low taxes on imported goods, including Nutraceuticals, food additives, and numerous other products that are traded from China, may lower their U.S. values, which would further increase their demand in the domestic market. This will further prompt traders to place orders in large quantities.

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