‘US and EU needed to respond to China industrial overcapacity’
US Treasury Secretary Janet Yellen said Tuesday that the United States and Europe needed to respond to China’s industrial overcapacity in a “strategic and united way” to keep manufacturers viable on both sides of the Atlantic.
Yellen told reporters during a visit to Frankfurt that G7 finance ministers shared US concerns about Chinese efforts to dominate clean energy industries, but did not need “detailed coordination” on trade actions following the imposition of steep US tariffs on Chinese goods.
“But I do think that the concerns about China’s strategy are shared and all I’m suggesting is that given that many countries share this concern, it’s more forceful to communicate to China as a group,” Yellen said.
In remarks on the US-European alliance in Frankfurt, Yellen said China’s excess industrial capacity threatened both American and European firms as well as the industrial development of emerging market countries.
“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 risk,” she said.
Last week, the Biden administration announced steep new tariffs on Chinese electric vehicles, solar products, semiconductors, battery parts, steel and other strategic industries.
Yellen had warned Chinese officials on a trip to Guangzhou and Beijing in April that the US would not accept their excess production of these goods that would flood global markets with cheap exports.
In remarks later at the TechQuartier technology and finance incubator in Frankfurt, Yellen said Chinese production
could
be
at in these sectors significantly exceeded global demand, threatening the development of clean energy industries around the world.
The Biden administration was taking action to protect US workers and firms from being undercut by “unfair Chinese economic competition,” she said.
She added that Chinese industrial capacity would be a focus of the Group of Seven finance meetings later this week in Stresa, Italy.
“We want to see healthy green technology sectors, from innovative start-ups to green manufacturing factories, in the United States, Europe, and around the world, not just in China,” Yellen said.
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.
She said that not every detail of the plan with a “completed term sheet” needed to be worked out by the time of the G7 leaders summit in Puglia, Italy, on June 13-15.
But the plan needed enough agreement that leaders could seriously consider it. (Reuters)