US Treasury Secretary Janet Yellen yesterday said 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 co-ordination” 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 could be at 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 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 Italy.
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