Yellen in China: USA Will Protect its Industry

US Treasury Secretary Janet Yellen’s six-day visit to China began on Thursday, April 4. During a stop in Alaska before flying to China, Yellen made some pretty threatening statements. She emphasized that Washington would consider imposing additional tariffs and trade barriers on goods from China, as US industry suffers from rising production in this leading Asian economy. According to the US Treasury Secretary, “China dominates a number of advanced industrial sectors and thereby limits the development of similar US industries.”

“We’re trying to develop some advanced areas like solar panels, innovative electric batteries, electric vehicles,” Yellen told reporters. She noted that “China has made huge investments in these industries, where production is growing rapidly.” Yellen emphasized that in order to boost US manufacturing, “other possible ways to protect (these industries) cannot be ruled out, as the effects of the provided Chinese subsidies impact the United States and others, such as Mexico, Japan, and countries in Europe.”

The agenda for Yellen’s second trip to China in the past 12 months (she visited Beijing in July 2023) includes talks with Chinese authorities, meetings with industry leaders and representatives of the US business community in China. Topics of upcoming conversations range from “unfair” trade practices attributed to China, to the possible impact of its excess industrial capacity on the global economy, to combating climate change. Yellen also intends to raise some “sensitive” issues, including increased cooperation between Washington and Beijing to combat trafficking of the fentanyl drug. It enters the USA from China, passing through some Latin American countries.

Yellen will first visit Guangzhou, where she will meet with Guangdong Provincial Governor Wang Weizhong, as well as a number of economic experts and representatives of American businesses in China. The visit program includes a bilateral meeting with Vice Premier He Lifeng before visiting Beijing. There she will meet with Premier Li Qiang of China’s State Council and Yin Yong, the mayor of the Chinese capital. After meeting with professors and students of Beijing University, Yellen is scheduled to speak with Chinese Finance Minister Lan Fo’an and then Chinese Central Bank Governor Pan Gongsheng.

Yellen’s trip to China comes after an unusual April 2 phone call between President Xi Jinping and President Joe Biden. The two leaders discussed a number of issues of bilateral relations, as well as regional and global issues. President Xi emphasized that in recent months, the two governments have “faithfully” followed the agreements reached at the China-US summit in San Francisco in November 2023. According to the Chinese leader, “this work has helped stabilize” relations between the world’s first and second largest economies. Nevertheless, “the intensification of negative factors cannot go unnoticed” in Beijing-Washington relations. According to Xi, the USA and China “cannot live without trade.” Therefore, they should “respect each other, peacefully coexist, and cooperate to achieve mutually beneficial results,” move on a “stable, healthy, and sustainable path, never turning back.”