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U.S. Treasury Secretary Janet Yellen warned China on the 27th (local time) not to flood the global market with low-cost products in the green industry.
Janet Yellen, who will be visiting China next month, pointed out during a visit to a solar company in Georgia, “China’s overproduction distorts global prices and production orders, harming American workers and farms. We hear these concerns from both developed and emerging countries.”
She added, “For President Joe Biden and me, it’s important that American workers and farms compete on a fair playing field. I’ve discussed China’s overproduction issue with them and will raise it as a key point during my next visit to China.”
Yellen also expressed concern that “China has previously overproduced metals such as steel and aluminum, causing damage to the global economy. Similar things are happening with solar panels, electric cars, batteries, etc., which will also disrupt the market.”
Yellen’s warning comes as the Biden administration seeks to revive the domestic green industry by providing substantial subsidies and tax breaks through the Inflation Reduction Act (IRA). However, while seeking to decouple from the ‘Chinese supply chain,’ environmental groups are concerned that excluding cost-competitive Chinese products may hinder achieving climate change goals.
Meanwhile, China has sued the World Trade Organization (WTO), claiming that the U.S.’s IRA is a discriminatory measure that hinders fair competition. This has reignited a trade dispute between the U.S. and China.
The Chinese delegation argued, “The IRA is being implemented under the pretext of responding to climate change and protecting the environment, but essentially has discriminatory characteristics as it provides subsidies only when products produced in the U.S. are purchased or imported from specific regions.” In response, the U.S. countered, “China continues to use unfair non-market policies and practices to strengthen the dominance of Chinese manufacturers.”
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