Yahoo Finance EU must join crackdown on China or risk factory closures, warns US Treasury Secretary
The EU must join the US in cracking down on Chinese green exports or risk factory closures, Treasury Secretary Janet Yellen has warned.
Ms Yellen told an audience in Frankfurt that Brussels needed to follow the US and restrict a flood of cheap Chinese green tech.
A failure to respond to the surge of low-cost electric vehicles and solar panels in a “united way” would threaten factories around the world, the Treasury secretary said.
China’s overproduction outpacing demand would also harm the industrial development of emerging market countries, she warned.
Addressing an audience that included Germany’s finance minister, Ms Yellen said: “China’s industrial policy may seem remote as we sit here in this room, but if we do not respond strategically, and in the united way, the viability of businesses in both our countries and around the world could be at risk.”
She added: “Support to low and middle-income countries and to workers around the world is essential for the strength of the global economy.”
The message from Washington comes after the US last week ramped up tariffs on Chinese clean energy exports in a bid to shield industry in crucial blue-collar states ahead of the election.
President Biden has accused Beijing of unfairly subsidising Chinese electric vehicle makers and other green industries, undercutting American competitors on price.
Chinese electric vehicles will face tariffs as high as 100pc as a result of the recent tightening in policy.
Solar products, semiconductors, battery parts and steel are also among the goods facing steep new import taxes.
It comes after Ms Yellen during a trip to China in April warned Beijing that the US would not stand by idly while it flooded the global market with cheap exports.
European leaders have signalled they prefer a less aggressive approach that would avoid restricting global trade.
Instead of tariffs, Brussels has opted for several probes into the role of Chinese state subsidies in green industries.
The investigations have sparked anger in Beijing but the bloc has insisted they are aligned with World Trade Organisation rules.
Ms Yellen rejected accusations that the US was seeking to sever ties with China and suggested it was moving towards “friend-shoring” by shifting supply chains into countries it is allied with.
She said: “We do not seek to decouple. We seek to diversify”.
The Treasury Secretary also warned that China dominates the supply of critical mineral supply chains for materials like copper, cobalt and nickel.
Ms Yellen was speaking ahead of the G7 meetings taking place in Italy at the end of this week.
She said she would be pushing G7 finance leaders to agree to plan for using the income derived from frozen Russian sovereign assets to provide a larger loan to Ukraine.
