Treasury Secretary Yellen's Reaction to Chinese Industrial Goods

Treasury Secretary Yellen's Reaction to Chinese Industrial Goods

The US government under Treasury Secretary Janet Yellen has announced that it will take measures to counter a flood of cheap Chinese industrial goods. Yellen stressed that President Biden's administration will not allow a repeat of a situation similar to that of more than a decade ago, when Chinese steel flooded global markets and wiped out U.S. jobs. However, it was not specified what measures could be taken to curb this development.

The U.S. government sees a risk to American companies as massive government support from China leads to overcapacity in areas such as electric vehicles, batteries and solar energy products. These subsidized products could flood the global market and drive out competition from developed countries that do not depend on government aid. Janet Yellen warned that flooding the market with cheap Chinese products could threaten the viability of foreign companies.

As a short-term solution, Yellen suggests that China take measures to boost domestic consumer demand. While she held talks with Chinese officials, it was stressed that global climate goals should not be jeopardized by trade restrictions. Chinese Prime Minister Li expressed the opinion that economic and trade issues should not be mixed with political or security matters. Trade Minister Wang Wentao dismissed concerns about Chinese electric car overcapacity and stressed the importance of continued technological innovation for the industry.