Yellen to China: U.S. Won’t Stand by as Overproduction Floods Market

U.S. Treasury Secretary Janet Yellen has stated that she will “leave nothing off the table,” including additional tariffs, in response to China’s problem of overproduction. She is committed to employing all possible measures to address this issue.

According to Bloomberg News on the 14th (local time), Secretary Yellen expressed her constant concern about the potential influx of Chinese exports into the U.S. market while appearing on CNN’s “Fareed Zakaria GPS.”

Yellen emphasized that this concern affects not only the U.S. but also Europe, Japan, and emerging markets such as India, Mexico, and Brazil.

Secretary Yellen raised the issue of China’s overproduction several times during her four-day visit to China last week. However, as the Biden administration strives to improve relations with China, it is not likely to consider additional tariffs immediately.

On the same day, Secretary Yellen also said that additional tariffs would be considered but emphasized, “But we hope to manage our relationship with China responsibly.”

She met Li Qiang, the Premier of the People’s Republic of China, during her visit to China. She emphasized the importance of improving bilateral relations, saying, “We have a lot to do, but we believe we have placed our bilateral relationship on a more stable foundation over the past year.”

Although the U.S. has consistently pointed out China’s overproduction, China is increasing its facility investment to enhance its industrial scale and productivity, thereby boosting its price competitiveness. According to the “Industrial Equipment Renewal Promotion Plan” announced by seven departments, including the China Ministry of Industry and Information Technology, they plan to increase the scale of industrial equipment investment by more than 25% compared to 2023 by 2027.

Electric vehicle prices are also being reduced at a record-breaking rate. According to the China Passenger Car Association, the price reduction of Chinese passenger cars in the first quarter of this year already equals 60% of last year’s total and the entire scale of 2022. The majority of the price reductions were applied to electric and hybrid vehicles.

Meanwhile, German Chancellor Olaf Scholz, who is currently visiting China, is also expected to emphasize the unfairness of the Chinese government’s subsidy policy and request restraint in overproduction during his meetings with Chinese President Xi Jinping and Premier Li Qiang on the 16th.