The United States and Europe must stage a “strategic and united” response to China’s industrial policies so local manufacturers can survive, the US Treasury Secretary said on Tuesday.
Janet Yellen, who spoke on the importance of the US-European alliance at an event in the German city of Frankfurt, said China’s excess industrial capacity was a threat to American and European companies, on both sides of the Atlantic, as well as industrial groups in emerging market nations.
“China’s industrial policy may seem remote as we sit here in this room, but if we do not respond strategically and in a united way, the viability of businesses in both our countries and around the world could be at risk,” she said.
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Her comments come a week after the Biden administration announced steep new tariffs on Chinese electric vehicles (EVs), solar products, semiconductors, battery parts, steel and other strategic industries.
She had warned Chinese officials in April that the US would not accept their excess production of these goods that would flood global markets with cheap exports.
Yellen, who received an honorary degree from the Frankfurt School of Finance and Management, said the European Union and other countries were taking similar actions to use their own authorities to investigate potential trade remedies for Chinese EVs and other products.
G7 to discuss action on frozen Russian assets
Yellen also called for Europe and the US to stand together against Russian aggression and Iranian “support for terrorism”, including agreeing on a way to unlock the value of some $300 billion worth of frozen Russian sovereign assets to aid Ukraine.
“That’s why I believe it’s vital and urgent that we collectively find a way forward to unlock the value of Russian sovereign assets immobilized in our jurisdictions for the benefit of Ukraine,” Yellen said.
“This will be a key topic of conversation during G7 meetings this week.”
Finance leaders from the Group of Seven industrial democracies are meeting in Stresa, Italy later this week and Yellen is pushing for them to agree on a plan to use the income stream from the frozen Russian sovereign assets to back a larger loan to Ukraine.
- Reuters with additional editing by Jim Pollard
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