Voters of all stripes are overwhelmingly backing current U.S. tariffs on China as a planned bilateral summit between US President Joe Biden and Chinese President Xi Jinping, according to a Morning Consult survey conducted from October 15 to 19 among 2,000 registered voters in the United States. Voter support for the tariffs suggests that the Biden administration will have little incentive to remove them in the near future, even as the White House faces continued setbacks from some U.S. companies.

But more tariffs are less likely to materialize, given Biden’s low approval ratings and the sensitivity of the electorate, especially among Democrats and Independents, to the impact of additional tariffs on prices. Coupled with historically high inflation – as more and more voters assign to Biden admin policies – the US government will have to be cautious in pushing tariffs further.

Background

News from the Biden-Xi summit come after October 4 speech by U.S. Trade Representative Katherine Tai, describing the Biden administration’s long-awaited trade policy in China amid a multi-year trade war. The policy aims to revive trade talks with Beijing, the first of which took place on October 8 – while maintaining the rates on $ 370 billion Chinese imports. The Biden administration also raised the possibility of imposing additional tariffs.

The reliance of the new policy on tariffs – a holdover from the Trump administration – is remarkable, given that existing tariffs on China are valued costing the average American household up to $ 1,000 or more per year. A wide range of American companies and groups of companies continue to press for the elimination of tariffs, highlighting their impact on the economy as they debate whether to absorb tariffs or pass them on to consumers.

The case of Biden to continue to rely on tariffs

Despite the impact of existing tariffs on prices to date, 61 percent of U.S. voters, including 57 percent of Democrats, support keeping them. And 49% of voters overall are also in favor of imposing additional tariffs on China.

Voters generally support US tariffs on China

Survey conducted from October 15 to 19, 2021 among 2,000 registered voters in the United States, with a margin of error of +/- 2%.

Both findings make the Biden administration’s threat to continue using tariffs as a more credible bargaining tool ahead of the next summit, even though 3 in 5 voters agree that existing tariffs have helped push prices up. US Treasury Secretary Janet Yellen also hinted at the potential inflationary impact of existing tariffs in recent past Remarks to Reuters.

3 in 5 voters believe U.S. tariffs on China helped push prices up

Share of voters who agree or disagree that existing U.S. tariffs on China have contributed to the price increase

Survey conducted from October 15 to 19, 2021 among 2,000 registered voters in the United States, with a margin of error of +/- 2%.

Voters’ views on the impact of tariffs on the U.S. economy may explain their overall support for them despite the risk of rising prices: half of registered voters, including 47% Democrats, 45% independents and 55% of Republicans say the tariffs on China are helping the US economy.

Half of voters, including most Democrats, believe existing Chinese tariffs are helping the US economy

Voters were asked if they think existing tariffs on China are helping or hurting the U.S. economy

Survey conducted from October 15 to 19, 2021 among 2,000 registered voters in the United States, with a margin of error of +/- 2%.

There are several plausible explanations for these responses, namely the perceptions that tariffs protect US jobs in industries competing with imports and shield US firms from competition with Chinese firms.

Additionally, Democratic voters are virtually divided on whether existing tariffs are hurting U.S. consumers (41%) or helping them (38%), indicating that a significant portion of Democrats who say tariffs have driven up prices do not really perceive the increase. as particularly harmful when it comes to personal consumption.

Democrats split over whether existing Chinese tariffs are helping or hurting U.S. consumers

Voters were asked if they think existing tariffs help or hurt U.S. consumers

Survey conducted from October 15 to 19, 2021 among 2,000 registered voters in the United States, with a margin of error of +/- 2%.

What could stop Biden from charging more tariffs

Faced with the administration’s threat to impose new tariffs, Biden will nevertheless find it difficult to assume the role of “Tariff Man” of his predecessor.

American voters, especially Democrats and Independents, are sensitive to the impact of existing tariffs on prices – and are even more likely to be sensitive to the prospect of additional tariffs. A plurality of Democratic voters support reducing existing tariffs if it results in lower prices (45%) and a slightly larger proportion oppose new tariffs on China if they result in higher prices (47% ). Independents are also divided over existing tariffs – 37% support their removal, while 38% do not – but a plurality share Democrats’ sentiment on the new tariffs.

Democratic voters are particularly sensitive to the impact of Chinese tariffs on prices

Survey conducted from October 15 to 19, 2021 among 2,000 registered voters in the United States, with a margin of error of +/- 2%.

Amid historically high inflation and low approval rates from the Biden administration (according to Morning Consult Track approval ratings from global leaders October 28) and one year away from the 2022 midterm election, Democrats and Independents’ views on tariff-induced price increases will likely make the Biden administration think twice before imposing duties. additional.

The Biden administration could still be successful in keeping the threat of new tariffs in its back pocket if it sees them as useful to the economy. Relatively high proportions of respondents – especially Democratic voters – who said they did not know or did not have an opinion on issues regarding the impact of existing tariffs on prices and support for new tariffs suggest that the administration has some chance of swaying Democratic sentiment in this direction. But keeping existing tariffs in place and forgoing new ones is the safest option.

The most likely outcome and the implications for business

An exceptionally cautious trade policy agenda from the Biden administration (and a medium-term strategy) would avoid the new tariffs entirely and rely on measures less likely to impact U.S. prices, such as the threat to restrict more. severely the ability of Chinese companies to list on US stock markets and acquire US companies.

A maximum approach that includes tariffs to some extent is more likely in cards. But companies that would prefer to do away with tariffs are not without recourse.

In particular, data from Morning Consult suggests that companies lobbying the administration to remove existing tariffs or waive new ones, as well as companies requesting waivers of existing tariffs, may strengthen their demands by putting the ” focus on the perceptions of Democratic and independent voters of the impact of tariffs on prices, especially if concerns about inflation exacerbate. The administration’s attention to price sensitivity among these voter segments is also likely to increase as the midterms draw closer, especially if Biden’s low approval ratings persist.

In contrast, strategies that invoke the impact of tariffs on the U.S. economy are more likely to fall flat due to the overwhelming sentiment of voters that existing tariffs are beneficial in this regard.

Appealing to voter price sensitivity to push back tariffs isn’t a sure-fire victory: 50% of registered voters and 48% of Democrats said they had not changed their spending habits over the course of the year. past year due to tariffs. This is good news for companies’ bottom line: it indicates that any reduction in consumer spending attributable to tariffs since their inception in January 2018 may have leveled off. But it also gives the Biden administration more leeway to continue to take advantage of tariffs at the expense of some businesses.

Half of voters haven’t changed spending habits because of Chinese tariffs this year

Share of registered voters who agree or disagree that they have changed their spending habits in the past year due to existing U.S. tariffs on China

Survey conducted from October 15 to 19, 2021 among 2,000 registered voters in the United States, with a margin of error of +/- 2%.


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