Yellen Says Nothing Off Table In Response To China Overcapacity

Economic

Political

Summary:

Treasury secretary wants to ‘responsibly manage’ China ties.Yellen also defends Biden’s domestic manufacturing push.

Treasury Secretary Janet Yellen said the US wouldn’t take “anything off the table” in response to China’s manufacturing capacity, including the possibility of additional tariffs to stem what she has described as a flood of cheap goods into the US market.

“We’re concerned about the possibility of surges in Chinese exports to our markets in areas where they have a great deal of overcapacity,” Yellen said on CNN’s Fareed Zakaria GPS. “I’ve been very clear in my discussions with them that this is a concern not only to us, but also to other countries, to Europe, to Japan, and even to emerging markets. India, Mexico, Brazil,” she said.

Yellen visited China last week, where she rebuked the country for “unfair economic practices,” including alleged mistreatment of US and other foreign companies operating in China and distortion of global markets by subsidizing overproduction in certain sectors.

Asked if additional US tariffs could be in the cards, Yellen told CNN, “I wouldn’t take anything off the table as a potential response. But we really want to responsibly manage this relationship.”

Chinese leaders have been pouring money into manufacturing, focusing on new industries such as electric vehicles, batteries and renewable energy as China looks for new sources of growth for its slowing economy.

President Joe Biden’s administration has tightened US measures to deny China advanced technology and has signaled it’s exploring tariff increase on Chinese EVs. The EU has launched a probe into subsidies for electric vehicles manufactured in China.

Inflation Influence

Yellen defended the administration’s efforts to boost domestic manufacturing to steer away from a reliance on cheap Chinese goods, saying the effort will have only “a very modest influence on inflation.”

She said surging Chinese imports since China joined the World Trade Organization were to blame in part for industry that’s “hollowed out” in parts of the US. “We want to engage in trade that’s mutually beneficial,” Yellen said in the interview broadcast Sunday.

Yellen warned China during her trip against supporting Russia in its war on Ukraine. She said companies that provide material support for Russia’s war, including banks which facilitate transactions that channel military goods to Moscow, will be at risk for US sanctions.

Bloomberg reported that US officials have warned China is providing Russia with substantial quantities of parts to build drones and missiles to bolster its resources in the conflict. The US has also been cautioning allies that China has provided geospatial intelligence to boost the Kremlin’s efforts, according to people familiar with the matter.

Treasury’s sanctions office is investigating some companies, both US and foreign, for selling chips that have eventually ended up in Russia. China denies seeking to benefit from Russia’s war in Ukraine.

“I was clear at the highest levels in my meetings that the United States will not tolerate violations of our sanctions by Chinese banks or firms that are aiding Russia in its war against Ukraine,” Yellen said. “And that if that’s done, that there will be consequences.”

Source：Bloomberg

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Risk Disclosure

The risk of loss in trading financial instruments such as stocks, FX, commodities, futures, bonds, ETFs and crypto can be substantial. You may sustain a total loss of the funds that you deposit with your broker. Therefore, you should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources.

No decision to invest should be made without thoroughly conducting due diligence by yourself or consulting with your financial advisors. Our web content might not suit you since we don't know your financial conditions and investment needs. Our financial information might have latency or contain inaccuracy, so you should be fully responsible for any of your trading and investment decisions. The company will not be responsible for your capital loss.

Without getting permission from the website, you are not allowed to copy the website's graphics, texts, or trademarks. Intellectual property rights in the content or data incorporated into this website belong to its providers and exchange merchants.

Recent Searches

Top Searches

Markets

Analysis

User

24/7

Economic Calendar

Education