US Must Be 'Strategic' on China Tariffs, Says Trade Chief Katherine Tai

"With respect to the tariffs, our approach as with everything in this relationship, is to be strategic," Tai said on Tuesday in an interview with Bloomberg Television's Shery Ahn and Haidi Lun.

"We have to keep our eye on the ball in terms of how to effectively realign the US-China trade and economic relationship."

Tai wouldn't say whether the administration would remove the tariffs, or give a time frame for making a decision.

"All options are on the table in terms of how we address our short-term economic needs, but our eye must be on the ball with respect to the medium and long term needs for the United States to realign this economic and trade relationship," she said.

Biden on Monday said he's considering removing some of the tariffs and would talk with Treasury Secretary Janet Yellen about it after returning to the US from Asia. The offshore yuan jumped as much as 0.7 per cent in reaction to those comments and reached the strongest level since May 5.

Tai earlier this month said that while relief from US tariffs on China is one option under consideration to confront the fastest inflation in four decades, the duties should be studied in the context of broader economic policy.

She dismissed March research from the Peterson Institute for International Economics, which estimated that eliminating a wide array of tariffs, including those on Chinese goods, could reduce inflation by 1.3 percentage points.

Her comments contrasted with Dr Yellen, who last month suggested the US is open to scaling back the widespread Trump-era tariffs on merchandise imports from China to help provide relief to Americans. While Dr Yellen has tended to focus more on the cost that tariffs impose on American consumers, Tai has highlighted the leverage that they provide at the negotiating table.

The Biden administration earlier this month also took the first step towards a review of tariffs on more than US$300 billion (S$412.6 billion) in Chinese imports, which is required to prevent them from automatically expire in July. Some economists, lawmakers and the US Chamber of Commerce have pressured the administration to reduce or eliminate the tariffs.

Former President Donald Trump imposed tariffs after an investigation concluded China stole intellectual property from American companies and forced them to transfer technology. China then responded with its own taxes on imports. Biden on Monday highlighted that he himself hadn't imposed the tariffs, but rather inherited them from his predecessor.

Aides within the administration have also expressed wariness to suspend tariffs and risk appearing soft on China ahead of the November congressional elections.

The Biden administration on Monday unveiled the 13-nation Indo-Pacific Economic Framework, which doesn't include any tariff reductions, in a bid to reassert US leadership on economic issues in the region.