By David Lawder
FRANKFURT (Reuters) – U.S. Treasury Secretary Janet Yellen said on Tuesday that the United States and Europe needed to respond to China’s industrial policies in a “strategic and united way” to keep manufacturers viable on both sides of the Atlantic.
In remarks on the importance of the U.S.-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.
Her comments come a week after the Biden administration announced steep new tariffs on Chinese electric vehicles (EVs), solar products, semiconductors, battery parts, steel and other strategic industries.
She had warned Chinese officials in April that the U.S. would not accept their excess production of these goods that would flood global markets with cheap exports.
Yellen, who received an honorary degree from the Frankfurt School of Finance and Management, said the European Union and other countries were taking similar actions to use their own authorities to investigate potential trade remedies for Chinese EVs and other products.
Yellen also called for Europe and the U.S. to stand together against Russian aggression and Iranian “support for terrorism”, including agreeing on a way to unlock the value of some $300 billion worth of frozen Russian sovereign assets to aid Ukraine.
“That’s why I believe it’s vital and urgent that we collectively find a way forward to unlock the value of Russian sovereign assets immobilized in our jurisdictions for the benefit of Ukraine,” Yellen said. “This will be a key topic of conversation during G7 meetings this week.”
Finance leaders from the Group of Seven industrial democracies are meeting in Stresa, Italy later this week and Yellen is pushing for them to agree on a plan to use the income stream from the frozen Russian sovereign assets to back a larger loan to Ukraine.
(Reporting by David Lawder; editing by Mark Heinrich and Alex Richardson)