Yellen Says China’s Trade Policies Could ‘Interfere Significantly’ With US Bilateral Relationship

Chinese “overconcentrated supply chains” threaten American jobs and recent investments intended to strengthen the country’s green energy industry, according to Treasury Secretary Janet Yellen. The Asian superpower’s trade policies “may interfere significantly with our efforts to build a healthy economic relationship.”

Yellen endorsed Biden administration initiatives meant to boost American economic competitiveness in a prepared speech she gave to Wall Street and corporate executives at the Economic Club of New York on Thursday afternoon.

Yellen | AP News Image

Yellen Says China’s Trade Policies Could ‘Interfere Significantly’ With US Bilateral Relationship

“When foreign subsidies threaten the viability of domestic firms” in important industries like green energy, she added, the United States should react. China’s green energy products are especially feared to undercut significant climate-friendly investments made possible by the Democrats’ August 2022 Inflation Reduction Act, which President Joe Biden signed into law.

Former President Donald Trump is making his argument to the Business Roundtable in Washington, an organization of over 200 CEOs, on why the economy would be better if he were back in the White House while Yellen is speaking.

Voters have heard from Biden and Trump, his likely Republican opponent, that they will be harsh on China.

The United States imposed major new duties this month on Chinese electric cars, cutting-edge batteries, solar cells, steel, aluminum, and medical equipment. On Wednesday, the European Union also acted to increase import duties, or tariffs, on Chinese-made electric vehicles after preliminary findings of a continuing inquiry into Chinese EV subsidies revealed that the nation’s battery electric vehicle “value chain” benefited from “unfair subsidization” that damaged EU competitors.

Yellen | Forbes Image

Yellen Says China’s Trade Policies Could ‘Interfere Significantly’ With US Bilateral Relationship

Chinese companies can charge as little as $12,000 for an electric vehicle. Chinese officials contend that their manufacturing keeps costs low and would support a shift to a green economy. They also claim that their solar cells and steel and aluminum mills have enough capacity to supply most of the world’s demand.

Among other concerns, Yellen mentioned in her statement on Thursday the proportion of Chinese manufacturing companies that are losing money, the high savings rates compared to other OECD nations, and the stringent investment regulations.

Yellen listed industries where Chinese government subsidies have fueled fast output growth, including the production of electric cars and their batteries and solar energy equipment, which the U.S. administration is attempting to boost domestically.

Yellen | CNN Image

Yellen Says China’s Trade Policies Could ‘Interfere Significantly’ With US Bilateral Relationship

“I reject the idea that ‘decoupling’ would help the US economy in any way,” she stated. Concurrently, a level playing field is necessary for us to fully enjoy the possible advantages of our economic partnership.

Her trip to Guangzhou and Beijing earlier this year was centered on industrial strategy and what the United States and Europe call China’s manufacturing overcapacity.

SOURCE – (AP)