Treasury Secretary Janet Yellen stated on Monday that she is open to considering various measures, including the possibility of imposing tariffs, on China’s exports in the green energy sector.
In an interview with CNBC’s Sara Eisen, she expressed openness to considering all options. She emphasized the importance of keeping everything on the table and expressed the desire to collaborate with China in finding a resolution. When asked about the potential for tariffs being imposed by the United States if China does not modify its approach to industry incentives, she stated, “I wouldn’t rule anything out at this point. We need to keep everything on the table. We want to work with the Chinese to see if we can find a solution.”
Yellen mentioned that she is not primarily concerned about export restrictions. Instead, she pointed out the potential changes in China’s macroeconomic policy and a possible decrease in local government subsidies to firms.
She emphasized the importance of establishing fair competition in the field of green technology.
“We are simply aiming to safeguard our business and ensure that our companies and employees have opportunities in these industries, which will play a crucial role in our future,” she emphasized.
Janet Yellen concluded her visit to Beijing, the capital of China, on Tuesday. Last week, she made her way to Guangzhou, a city in southern China, to engage with Chinese officials. This visit comes at a time when the economic ties between the United States and China remain strained.
The United States has expressed growing concerns over the excessive availability of subsidized Chinese clean energy products, including solar power, electric vehicles, and lithium-ion batteries. These products are being exported to international markets at discounted prices, which the White House believes is detrimental to the competitiveness of domestic companies. This concern is shared by U.S. allies such as Japan and Europe, as they have experienced an inundation of cheap Chinese products, particularly solar panels, in their own markets.
Janet Yellen expressed her concerns about China’s practices in the industry, stating that while it is acceptable for Chinese firms to export and develop in this sector, certain techniques they employ, such as heavy subsidization and continued support for companies even when they are incurring losses, are deemed unacceptable from the perspective of the United States and its allies.
The possibility of imposing trade restrictions on China is being explored by other countries, according to the Treasury secretary. Currently, the European Union is conducting an investigation into the potential “dumping” of subsidized Chinese electric vehicles in the region. This investigation is crucial as it has the potential to undermine the European Union’s significant automotive industry.
German Chancellor Olaf Scholz expressed skepticism about the necessity of imposing tariffs on Chinese electric vehicles (EVs), citing the bloc’s strong trade connections with China. In a statement before his visit to China, Scholz’s spokesperson stated that the Chancellor was cautious about the implementation of such measures, as reported by Reuters.
According to China’s Ministry of Commerce, Wang Wentao, China’s minister of commerce, dismissed the accusations of oversupply made by the U.S. and Europe. He emphasized that the growth of China’s electric vehicle (EV) industry is a direct outcome of “constant innovations.”
Former President Donald Trump imposed a policy that currently imposes substantial 27.5% tariffs on Chinese-built electric vehicles (EVs) in the U.S. This policy was implemented due to concerns regarding unfair trade practices by Beijing.
The Biden administration had previously contemplated reducing the tariffs. However, Yellen stated that they are currently under review due to reports suggesting that they might be raised even more under pressure from Republican lawmakers. On the other hand, China has urged for these tariffs to be limited.
Yellen stated that China has expressed their desire for a reduction in them for a significant period of time.
The Commerce Department is currently conducting an investigation into the potential national security risks associated with Chinese electric vehicle (EV) imports. This inquiry is particularly focused on the extensive data that can be collected through the use of “connected” car technologies.
Amid increasing doubt about the potential risks Chinese technologies may pose to U.S. national security, U.S. lawmakers recently approved a bill that urges Chinese tech giant ByteDance to sell off its popular TikTok social media app in the U.S. or face a possible ban.
When questioned about her thoughts on whether China would permit the sale of TikTok’s assets to a U.S. company or U.S. investors, Yellen expressed her reluctance to speculate on future developments.
According to her, the company is highly significant and lucrative, and she believes that they are worried about the possibility of being compelled to leave the United States.
The Biden administration has expressed its intention to crack down on various Chinese companies that are deemed to be against U.S. geopolitical and strategic interests. Specifically, Washington has proposed imposing sanctions on Chinese entities that are found to be assisting Russia’s military and its activities in Ukraine.
Janet Yellen, the former Chair of the Federal Reserve, expressed her strong objection to China providing military support to Russia. She emphasized that such actions are deemed unacceptable by the United States. However, Yellen clarified that this does not mean China cannot maintain a relationship with Russia.
“China and Russia engage in extensive trade, most of which is without any issues. However, any form of military assistance provided by China to Russia in their ruthless conflict with Ukraine is completely unacceptable to us. We possess the capability to impose sanctions in response to such actions.”
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