‘Significant’ Chinese response to US tariffs possible: Janet Yellen

Posted by Admin May 13, 2024 World

Beijing could possibly issue a “significant” response to US tariffs on Chinese goods, Treasury Secretary Janet Yellen said on Monday when asked about the prospect of fresh levies.

The United States is reportedly planning to raise tariffs on Chinese clean energy goods such as electric vehicles, batteries and solar products, with an announcement expected this week.

“President [Joe] Biden believes that anything we do should be targeted to our concerns and not broad-based, and hopefully we will not see a significant Chinese response. But that’s always a possibility,” Yellen told Bloomberg TV in an interview on Monday.

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A US decision on tariffs would come at the end of a long-awaited review of levies imposed during a trade war between Washington and Beijing.

The administration of then-president Donald Trump had introduced levies on some US$300 billion in goods from China.

Officials have since initiated a review, with the US Trade Representative required to look into the impact of the action – first introduced in 2018 – after four years.

In the latest move, set to be announced on Tuesday, levies on EVs are expected to roughly quadruple, according to the Wall Street Journal.

Yellen said on Monday that she did not want to get ahead of any potential announcement on the review.

But she stressed that “the president believes that it’s critically important for the United States to have a role and a presence in strategic industries like semiconductors and like clean energy”.

I have been very clear in my engagement with the Chinese that we believe there needs to be a level playing field for competition

Janet Yellen, US Treasury Secretary

Those sectors will form the foundation of job creation and national security in the decades ahead, Yellen added.

“I have been very clear in my engagement with the Chinese that we believe there needs to be a level playing field for competition, and that we have particular concern about clean energy, semiconductors and areas where China has, through its policies, encouraged so much investment that it’s led to overcapacity,” she said.

Yellen said she was hopeful that China would recognise that US actions were targeted, and declined to speculate on any possible retaliatory measures by Beijing. “We’re going to try to keep our actions targeted, and we’ll see what happens,” she said.

During a recent visit to China, Yellen warned about overcapacity in the world’s second biggest economy – risking a flood of below-cost goods in the global market.

Yellen attends a meeting in Beijing, China on April 7. Photo: AP

The Biden administration fears that overproduction could deal a blow to burgeoning US industries, especially in green tech.

Noting that China has “enormous subsidies in critical areas of advanced manufacturing”, she said Biden wants to ensure that US stimulus provided through the Inflation Reduction Act to support industries are protected.

“He believes it’s unacceptable, as I do, to be completely dependent on China in these areas,” Yellen said.

Yellen on Monday is visiting Stafford County, Virginia, where she toured a broadband infrastructure project funded by the Biden administration.

Additional reporting by Reuters