Inflation is being driven by supply-chain disruptions, a worker shortage, increased consumer demand and bond purchases by the Federal Reserve — all in response to the pandemic — not companies trying to boost their profit by hiking prices, the top business representative in President Joe Biden’s cabinet said on Friday.
Gina Raimondo, the U.S. Secretary of Commerce, said, “Corporations aren’t suffering due to inflation the way that consumers are, and you always have some bad actors. But I would say if you look at inflation … it’s not confined to any particular sector.”
She continued, “It’s very clearly tied to the supply-chain disruptions, lack of supply, the labor-market disruption due to COVID and the Fed’s unprecedentedly liberal monetary policy” in buying bonds in 2020 to revive the U.S. economy from a virus-induced recession.
Raimondo's response to journalists' questions in Manhattan was at odds with left-leaning Democrats who say corporate America is behind the rise in prices while Republicans point to the Biden administration's emphasis on renewable energy over new sources of fossil fuels is the culprit.
Raimondo said the Biden administration is examining myriad ways of combating the rise in consumer prices, which accelerated last year.
Nationally, the consumer price index rose 8.3% in April, year over year, and in the New York area, up 6.3%. Both were driven by spikes in the cost of gasoline, groceries and used automobiles.
Raimondo was tapped to lead the Commerce Department in March 2021 after serving as Rhode Island’s first female governor and starting a venture capital firm in that state.
Speaking remotely to the Society for Advancing Business Editing and Writing on Friday, Raimondo said the Commerce Department is studying whether reducing import taxes, or tariffs, even temporarily, would impact consumer prices. But she ruled out scrapping the 232 tariffs on imported steel and aluminum that were levied by then-President Donald Trump.
“You can’t have a strong economy, you can’t have national defense if you allow your steel industry to wither,” she said, adding that Trump imposed the tariffs in 2018 because China was undercutting U.S. producers. “We want our steel operations and aluminum [operations] to be at a minimum of 80% capacity.”
Raimondo said steel and aluminum tariffs have been lowered for close U.S. allies, such as the European Union, Japan, the United Kingdom, and most recently, Ukraine.
“We take it on a case-by-case basis [but] we certainly will not allow any access to our market of the Chinese steel that’s dumped” at low prices to undercut domestic producers, she said.
Asked about her department's probe of imported solar panels, Raimondo said if it's determined that China is unfairly competing against domestic producers, the tariff won't be exorbitant. "I do hear floating around this concept of a 200% tariff," she said. But a potential tariff is "much more likely to be in the 10% to 15% range."