Biden’s empty inflation rhetoric | The Business Standard
Skip to main content
  • Latest
  • Economy
    • Banking
    • Stocks
    • Industry
    • Analysis
    • Bazaar
    • RMG
    • Corporates
    • Aviation
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • Subscribe
    • Epaper
    • GOVT. Ad
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
The Business Standard

Friday
July 11, 2025

Sign In
Subscribe
  • Latest
  • Economy
    • Banking
    • Stocks
    • Industry
    • Analysis
    • Bazaar
    • RMG
    • Corporates
    • Aviation
  • Videos
    • TBS Today
    • TBS Stories
    • TBS World
    • News of the day
    • TBS Programs
    • Podcast
    • Editor's Pick
  • World+Biz
  • Features
    • Panorama
    • The Big Picture
    • Pursuit
    • Habitat
    • Thoughts
    • Splash
    • Mode
    • Tech
    • Explorer
    • Brands
    • In Focus
    • Book Review
    • Earth
    • Food
    • Luxury
    • Wheels
  • Subscribe
    • Epaper
    • GOVT. Ad
  • More
    • Sports
    • TBS Graduates
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • Gallery
    • Long Read
    • Interviews
    • Offbeat
    • Magazine
    • Climate Change
    • Health
    • Cartoons
  • বাংলা
FRIDAY, JULY 11, 2025
Biden’s empty inflation rhetoric

Panorama

Michael R Strain, Project Syndicate
22 June, 2022, 03:30 pm
Last modified: 22 June, 2022, 03:38 pm

Related News

  • 35% tariff: Commerce adviser meets US trade representative in Washington
  • Tariff implications: What does Trump actually want to achieve?
  • What Hitler’s tariff policy misfire can teach the modern world
  • US sanctions UN rapporteur Francesca Albanese over ICC ties, criticism of Israel
  • 35% tariff: Bangladesh, US 'agree on most issues' as first day of talks ends

Biden’s empty inflation rhetoric

Inflation has become the single-most important economic policy issue in the US but you wouldn't know it from watching the Biden administration

Michael R Strain, Project Syndicate
22 June, 2022, 03:30 pm
Last modified: 22 June, 2022, 03:38 pm
Biden has yet to follow through on his promise to “do everything” that he can do to lower prices. Photo: Bloomberg
Biden has yet to follow through on his promise to “do everything” that he can do to lower prices. Photo: Bloomberg

In response to surging prices, United States President Joe Biden declared this month that "fighting inflation" is his "top economic priority." He promises that his administration "will continue to do everything we can to lower prices for the American people." Yet notwithstanding such statements of commitment, Biden has refused to lift the Trump administration's tariffs on goods imported from China.

Consumer prices are growing at their fastest rate in four decades. In May alone, the Consumer Price Index increased by 1%, putting it 8.6% above its level one year before. And the problem is not just rising food and energy prices. Although core inflation, which excludes those factors, is not accelerating, it is at a high level and not declining, indicating that inflation is entrenched throughout the economy.

By stimulating consumer demand well above the economy's productive capacity, the Biden administration's $1.9 trillion stimulus package, passed in March 2021, contributed to the sharp rise in consumer prices. Now, the task of shepherding the economy back to an environment of low, stable inflation falls largely to the US Federal Reserve.

The Business Standard Google News Keep updated, follow The Business Standard's Google news channel

Biden has made a laudable effort to ensure that the Fed's decisions are independent of political influence. And after being too slow to recognise the magnitude of the inflation challenge in 2021, he has at least adopted the appropriate rhetoric for the moment. But since the president's tools for combating inflation are very limited, no option should be left off the table.

In a March 2022 Peterson Institute for International Economics policy brief, economists Gary Clyde Hufbauer, Megan Hogan, and Yilin Wang estimated that eliminating Trump's trade war tariffs would directly reduce CPI inflation by 0.3 percentage points. And as corporations attempt to compete in a context of lower domestic and import prices, the reduction could grow to as much as 1.3 percentage points over the longer term.

Moreover, Hufbauer, Hogan, and Wang find that a broader package of trade-liberalisation policies would produce an even larger effect. They outline a plan that would include rolling back Trump's China tariffs; waiving duties on Canadian lumber; relaxing rules that exclude foreign competitors from US government procurement; capping tariffs on a range of goods; and expanding the scope of duty-free imports from developing countries. 

This plan would reduce tariffs, duties, and quotas on $610.5 billion of imported goods, reducing CPI inflation by 0.5 percentage points directly. Over the longer term, the reduction could be as great as two percentage points.

In the face of 8.6% inflation – which may not represent a peak – reductions in this range might not seem like much. But with the typical household spending $460 per month more than it did last year to buy the same goods and services, every little bit helps. And even if rolling back the trade-war tariffs had no effect at all on inflation, it would still benefit the economy. Trump's protectionism was a failure on its own terms: it reduced, rather than increased, manufacturing employment.

In a December 2021 working paper studying the US tariff increases in 2018-19, Aaron Flaaen and Justin Pierce estimate that shifting a domestic industry from relatively light exposure to tariffs (at the 25th percentile) to relatively heavy exposure (at the 75th percentile) was associated with a 2.7% reduction in manufacturing employment. Any benefits from import protection were dwarfed by the boost to input costs for domestic producers and the employment costs stemming from other countries' retaliation.

The White House has been considering lifting the Trump tariffs for months, but it has refused to act. US-China relations are increasingly adversarial, and the administration is likely reluctant to de-escalate unilaterally. Biden also may be worried about weakening his support among labour unions (which tend to favour protectionist measures).

But if Biden is still being swayed by these considerations, then he has not in fact made fighting inflation his "top economic priority." The White House needs to signal that it understands the gravity of the problem. That means going beyond rhetoric and demagogic attacks on the supposed profiteering of domestic oil refiners. It means that other important priorities will need to come second.

To be sure, concerns about China are legitimate. But the current tariff regime has to go. Protectionism that hurts US companies and raises prices for consumers is ineffective and harmful. Instead, the administration should focus its efforts on stopping the forced transfer of technology from US companies, leading a serious multilateral effort to compel China to comply with international law and norms, and taking additional steps to establish American economic leadership in the Pacific region. And it should increase support for basic research so that the US can continue to out-innovate China.

Biden has yet to follow through on his promise to "do everything" that he can do to lower prices. Reducing tariffs is low-hanging fruit. Pick it, Mr President.


Michael R Strain. Sketch: TBS
Michael R Strain. Sketch: TBS

Michael R. Strain is the Director of Economic Policy Studies at the American Enterprise Institute.

Disclaimer: This article first appeared on Project Syndicate, and is published by special syndication arrangement.

USA

USA / US President Biden / inflation

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • Bangladesh's delegation, led by Commerce Adviser Sk Bashir Uddin, began high-level negotiations with USTR Ambassador Jamieson Greer at 9pm Bangladesh time on Thursday (10 July). Photo: Collected from the Facebook handle of Golam Mortoza, Press Minister at the Bangladesh Embassy in the US
    No need to worry as US tariff talks ongoing: Fouzul tells biz leaders
  • Infographics: TBS
    How tender rules and a lone bidder stall a $2.5b power plant
  • Commerce Adviser Sk Bashir Uddin met USTR Ambassador Jamieson Greer at the USTR office in Washington, DC on 10 July 2025. Photo: CA Press Wing
    35% tariff: Commerce adviser meets US trade representative in Washington

MOST VIEWED

  • Graphics: TBS
    BB raises startup fund limit, drops upper age barrier
  • Workers pack undergarments at the packing section of a garment factory in Ashulia, on the outskirts of Dhaka, Bangladesh, April 19, 2025. Photo: REUTERS/Fatima Tuj Johora
    After US tariffs, jobs hang by a thread in Bangladesh's garments sector
  • Photo: Mohammad Minhaj Uddin/TBS
    SSC, equivalent results: Pass rate drops to 68.45%, GPA-5 also declines
  • File photo of containers at Chattogram port/TBS
    US buyers push Bangladeshi exporters to share extra tariff costs
  • Govt vehicle purchase, foreign trip, new building construction banned: Finance ministry
    Govt vehicle purchase, foreign trip, new building construction banned: Finance ministry
  • Students sit for SSC exam at Motijheel Girls' High School on 10 April 2025. Photo: Mehedi Hasan/TBS
    SSC exam results out: Here's how you can check online and via SMS

Related News

  • 35% tariff: Commerce adviser meets US trade representative in Washington
  • Tariff implications: What does Trump actually want to achieve?
  • What Hitler’s tariff policy misfire can teach the modern world
  • US sanctions UN rapporteur Francesca Albanese over ICC ties, criticism of Israel
  • 35% tariff: Bangladesh, US 'agree on most issues' as first day of talks ends

Features

Photo: Collected/BBC

What Hitler’s tariff policy misfire can teach the modern world

13h | The Big Picture
Illustration: TBS

Behind closed doors: Why women in Bangladesh stay in abusive marriages

16h | Panorama
Purbachl’s 144-acre Sal forest is an essential part of the area’s biodiversity. Within it, 128 species of plants and 74 species of animals — many of them endangered — have been identified. Photo: Syed Zakir Hossain/TBS

A forest saved: Inside the restoration of Purbachal's last Sal grove

16h | Panorama
Photo: Rajib Dhar/TBS

11 July 2024: Riot vehicles, water cannons hit the streets as police crack down on protesters

9h | Panorama

More Videos from TBS

'Hypocrisy' will not continue, Iran tells IAEA

'Hypocrisy' will not continue, Iran tells IAEA

11h | TBS World
OpenAI to release web browser in challenge to Google Chrome

OpenAI to release web browser in challenge to Google Chrome

11h | TBS World
Will the title 'Honorable and Excellency' be abolished?

Will the title 'Honorable and Excellency' be abolished?

12h | TBS Today
July Declaration must be constitutionally recognized: Akhtar Hossain

July Declaration must be constitutionally recognized: Akhtar Hossain

12h | TBS Today
EMAIL US
contact@tbsnews.net
FOLLOW US
WHATSAPP
+880 1847416158
The Business Standard
  • About Us
  • Contact us
  • Sitemap
  • Advertisement
  • Privacy Policy
  • Comment Policy
Copyright © 2025
The Business Standard All rights reserved
Technical Partner: RSI Lab

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - oped.tbs@gmail.com

For advertisement- sales@tbsnews.net