The United States,
battling its highest inflation in the last forty years, is planning a potential
pause on federal gas tax as gasoline prices continue to soar, according to two
officials on Sunday. Janet Yellen, the US Treasury Secretary, further said that
some tariffs on China inherited from the Trump administration may be removed
because they served “no strategic purpose.” The Biden Administration is
considering removing the tariffs to control inflation.

“We all recognise
that China engages in a range of unfair trade practices that is important to
address but the tariffs we inherited, some serve no strategic purpose and raise
cost to consumers,” said Yellen speaking to ABC News. The US president has said
that he is considering removing some tariffs imposed on hundreds of billions of
dollars’ worth of Chinese goods.

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The treasury
secretary and the energy secretary reemphasised Biden’s point that a recession
was “not inevitable”. Yellen said the labour market and consumer spending
remained strong and a recession was not predicted despite slowing growth. She
did, however, accept that inflation was “unacceptably high” and added that she
expected the economy to slow.

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Not all experts
hold a similar view. Lawrence Summers, a former US Treasury Secretary, told NBC
News that he expected a recession. “The likelihood is that in order to do what’s
necessary to stop inflation, the Fed is going to raise interest rates enough
that the economy will slip into recession.”

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A surge in
inflation has made hawks of federal policymakers. Last week, when Fed officials
raised the central bank’s interest rates by the biggest rate in over quarter of
a century, one Fed Reserve policymaker dissented. The Federal Reserve raised
target federal funds rate by three-quarters of a percentage point to a range between
1.5% and 1.75%.