Tariffs, as you recall, are costing suppliers up to 30 percent on some car audio goods and contributing to higher price tags on amplifiers, speakers, head units and other products.
The tariffs on Chinese goods levied several years ago are set to expire starting in July, unless industries petition the Fed to extend them, reports Politico.
The US Trade Representative’s office is expected to start taking comments on the issue.
Some economists and government officials are calling on the Biden administration to reduce the tariffs as a means of lowering inflation.
A well-reviewed study in March found that rolling back about 2/3rds of the tariffs on Chinese goods would return $800/year in US consumers’ pockets. This is one of the most effective tools available at present for reducing inflation, said some economists.
However, others in Washington, including US Trade Representative Katherine Tai would like to keep the tariffs in place as a bargaining chip for negotiations with China.
By contrast, US Treasury Secretary Janet Yellen said she would like to see a roll back in tariffs.
The Trump administration’s tariffs amounted to an average of 16 percent fees on $506 billion in goods or $81 billion in higher costs for consumers.
In car audio, some suppliers pay tariffs of 25 to 30 percent on amplifiers and head units. Some pay a 7.5 percent fee on speakers and others pay 25 to 30 percent on Advanced Driver Assistance Systems (ADAS). The fees amount to tens of millions of dollars a year to the 12 volt industry.