U.S. Treasury Secretary Janet Yellen raises concerns about China’s “unfair, non-market” economic policies.
Published July 5, 20225. July 2022
US Treasury Secretary Janet Yellen and Chinese Deputy Prime Minister Liu He discussed economic issues, including international trade and supply chains, as the Biden administration considered lowering tariffs on Chinese goods to drive up inflation.
In a virtual meeting with its Chinese counterpart on Tuesday, Yellen “honestly” raised concerns about China’s “unfair, non-market” economic policies in the Russian war against Ukraine, the U.S. Treasury Department said in a statement.
The two sides also discussed the global economic outlook related to rising commodity prices and food security demands during the call, which the Treasury Department described as “free and substantial” and part of efforts to “maintain open lines of communication”.
“Yellen’s comments do not seem to go much beyond what US officials have said before,” said James Laurenson, director of the Australia-China Relations Institute, Al Jazeera.
“The question is what the US will do without just repeating the same accusation. Many trade law scholars argue that there is considerable scope for seeking recovery at the WTO, but the US seems unenthusiastic towards the institution. But more unilateral sanctions will not change Chinese policy and they will not win over the US Pludits, even from close allies like Japan and Australia who are committed to the WTO and its processes.
Following the call, China’s Ministry of Commerce said the “pragmatic and frank” talks touched on the macroeconomic situation and the stability of global supply chains.
China has also expressed concerns about US tariffs and sanctions against Chinese companies, the ministry said, adding that both sides have agreed to continue the dialogue.
“As the global economy faces dire challenges, it is of great importance to strengthen the communication and coordination of macro-policies between China and the United States,” the ministry said in a statement.
“The security of the stability of global industrial and supply chains will serve the benefits of China, the United States and the world.”
Discussions are coming as US President Joe Biden is considering the possibility of easing tariffs on Chinese imports as part of efforts to control rising prices, which are rising at their fastest rate in more than 40 years.
Biden’s cabinet is reportedly divided over whether to ease tariffs, some of which were inherited by former President Donald Trump, based on what he saw as unfair Chinese trade practices.
Yellen publicly urged Biden to reduce some tariffs, arguing that they “make no strategic sense” and are “paid by Americans, not by the Chinese.”
Deborah Elms, founder and executive director of the Asian Trade Center in Singapore, described it as positive that officials from the two largest economies in the world continue to meet.
“There is no way to manage tensions when communication is handled through the media rather than in person, or via zoom,” Elms told Al Jazeera.
“The US administration’s line on China has been, and will continue to be, that China practices unfair trade. So it’s no surprise for Yellen to repeat the statement. The big question, of course, is what can be done about it. Having discussions is a useful first steps, but must be pursued with more than random conversations between government officials.
At the G7 summit in Germany last month, US National Security Adviser Jake Sullivan said that Biden and Chinese President Xi Jinping would hold talks in the coming weeks.
Gary Ng, a senior economist at Natixis in Hong Kong, said the US and China are unlikely to depend on their growing rivalry despite dialogue or reductions in tariffs.
“While it is possible to see a decline in tariffs on some products, the US remains concerned about the role of government subsidies and progress towards achieving competitive neutrality for its companies in China,” Ng told Al Jazeera .
“These are structural issues about whether US companies are treated the same as their Chinese counterparts with spillover effects not only in market access in China but also in global competition. Dialogue can strengthen short-term sentiment, but it is by no means a U-turn of strategic competition between the US and China.
