Opinion | US coronavirus economic relief package has one glaring flaw: failure to lift tariffs

The United States has become the new epicentre of the coronavirus pandemic. As cases of infection and death tolls continue to climb, the US economy has begun to go into free fall, with the jobless rate expected to hit 20 per cent, a level not seen since the Great Depression. The fate of economies elsewhere is just as dire, if not worse. For the first time in modern history, all economic engines worldwide are in “great lockdown” mode.

The US Federal Reserve has acted swiftly to cut interest rates to zero and establish a bond purchasing programme, liquidity support and lending facilities, measures of a magnitude not seen since the 2008 financial crisis. The Trump administration has worked with Congress to swiftly pass an over US$2 trillion economic relief and stimulus package, the largest in US history.

Despite its extraordinary size, there is a glaring flaw in the US economic package – a failure to lift the high tariffs the US has imposed, before the Covid-19 outbreak, against its most important trading partners, notably China. Continued tariffs will undercut the effectiveness of the US’ efforts to contain the economic fallout of this crisis.

First, continued tariffs hamper the US and global efforts to fight the pandemic by causing acute shortages and price spikes of critical medical supplies, such as testing kits, ventilators, protective gowns and N95 masks. The Trump administration should immediately remove all tariffs on medical products.