National Retail Federation has written a letter of request for immediate tariff relief to address the ongoing inflation facing American businesses, workers and consumers.
According to NRF removing the harmful China 301 tariff will alleviate some of the inflationary pressure on the U.S. economy.
According to a recent Moody’s Investor Service Report, the tariffs “hit American businesses and consumers hardest,” with China absorbing only 7.6 percent of the tariffs “while the rest of the tab was picked up by Americans.”
NRF is the world’s largest retail trade association, representing discount and department stores, home goods and specialty stores, Main Street merchants, grocers, wholesalers, chain restaurants and internet retailers from the United States and more than 45 countries.
The latest Consumer Price Index and Producer Price Index data shows that consumer prices increased 8.3% and wholesale inflation rose 11% over the past year.
Retail is the nation’s largest private-sector employer, supporting one in four U.S. jobs — 52 million working Americans. Contributing $3.9 trillion to annual GDP, retail is a daily barometer for the nation’s economy.
According to NRF one of the most effective and meaningful tools tariff reliefs has not yet been put forward.
This is a missed opportunity. Inflation is likely to linger in the economy for many months.
The steps being taken by the Federal Reserve — shrinking its balance sheet and raising interest rates are primary tools to reduce demand for goods and services so that price increases moderate.
Unfortunately, this could further hurt businesses, workers and consumers.
Providing relief from the harmful Section 301 tariffs on goods from China would reduce the CPI by 1.3 percentage points, immediately helping alleviate inflation.
These tariffs, many of them in effect since 2018, have not achieved their desired goal of pressuring China to change its trade policies.
The tariffs, which are applied to everything from parts and materials to finished goods, have only resulted in increased costs that ultimately get passed along to the end consumer.
The Congressional Budget Office estimated that the tariffs cost the average American household more than $1,200 in 2020.
Providing tariff relief now can alleviate inflation pressures in the economy and provide targeted relief to consumers until the Fed’s job is done.