Biden says Fed targeting inflation, China tariffs under review

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WASHINGTON, May 10 (Reuters) – U.S. President Joe Biden, under pressure to tame high inflation, told Americans on Tuesday that he understands their plight and that he and the U.S. Federal Reserve are working to solve what he called his administration’s top domestic priority.

“They’re frustrated,” Biden said of Americans paying more for goods and services across the board. “I don’t blame them.”

As inflation pushes annual consumer prices more than 8% higher than a year ago, the president highlighted his release of oil from strategic petroleum reserves and his pressure on companies with record-high profits to lower prices.

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“I want every American to know that I am taking inflation very seriously and it is my top domestic priority,” Biden told reporters.

Fewer than half of U.S. adults – 42% – approve of Biden’s handling of the presidency and they rate the economy as the country’s most important problem, according to a Reuters/Ipsos poll this week.

Inflation

Biden said the COVID-19 pandemic, coupled with supply chain issues and Russia’s war on Ukraine, were to blame for the inflation spike.

Biden and fellow Democrats rushed trillions in new COVID aid and infrastructure spending into the economy last year, fueling a record rebound last year. Republicans and some economists have said the spending also fueled inflation.

A March study from the Federal Reserve bank of San Francisco estimated U.S. fiscal stimulus added 3 percentage points to current inflation data, but said without the spending the economy might have tipped into deflation, which would have been more difficult to manage.

“We’re in power,” Biden said when asked whether he deserved the blame for high prices. “We control all three branches of government. Well, we don’t really,” he added, lamenting his fellow Democrats’ inability to get other spending bills passed because of their narrow control of Congress.

Biden said the U.S. Federal Reserve should and will do its job to control it. The U.S. central bank raised interest rates by half a percentage point last week and is expected to roll out additional hikes this year. read more

U.S. President Joe Biden arrives to deliver remarks on expanding high-speed internet access, during a Rose Garden event at the White House in Washington, U.S., May 9, 2022. REUTERS/Kevin Lamarque/File Photo

The president did not announce new policy measures in the speech ahead of new consumer price data on Wednesday expected to show inflation remained elevated through April.

But he said he was considering eliminating Trump-era tariffs on China as a way to lower prices for goods in the United States. “No decision has been made on it,” he said.

White House press secretary Jen Psaki told reporters later there could be more on tariffs in “coming weeks.”

AIMING AT REPUBLICANS

Biden and top officials said multiple times as prices rose in 2021 that they expected inflation to be temporary, but it has persisted.

On Tuesday, he sought to deflect blame to Republicans, who he said have less of a plan than he does and have thwarted his policies to fight it. Democrats are defending narrow majorities in the Nov. 8 congressional elections that will determine who controls the Senate and House of Representatives.

Republicans have promoted loosening regulations on oil and gas producers as well as cutting some taxes and government spending, but have not endorsed any policy document on inflation.

Biden took aim at a “Rescue America” proposal from Republican Rick Scott, the U.S. senator from Florida, that includes a federal minimum income tax which the White House says would cost middle-class families $1,500 a year.

“The Republican plan is to increase taxes on middle class families,” he said.

Scott, speaking to reporters on Capitol Hill, shot back: “He just wants to blame everybody.”

Scott has said the plan is solely his own, despite his role as chairman of the National Republican Senatorial Committee, the campaign arm of the Senate Republican caucus. Republican Senate Leader Mitch McConnell has rejected Scott’s calls to tax Americans who pay no income tax and to sunset Social Security and Medicare entitlements.

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Reporting by Trevor Hunnicutt and Jeff Mason; Additional reporting by Steve Holland and David Morgan; Editing by Heather Timmons and Howard Goller

Our Standards: The Thomson Reuters Trust Principles.

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