US urges China to revise policies impacting new industries

US Treasury Secretary Janet Yellen warned China that the US will not tolerate new industries being harmed by Chinese imports, Reuters reported on Monday. She emphasised the need for Beijing to address excess industrial capacity during her recent meetings.

Yellen stated that President Joe Biden is committed to preventing a repeat of the negative impact caused by Chinese imports in the early 2000s, which led to the loss of two million American manufacturing jobs.

While she did not mention specific trade actions, she raised concerns about China’s state support for industries like electric vehicles, batteries, and solar panels.

During her visit to China, Yellen highlighted the issue of overinvestment in manufacturing capacity, which has resulted in a surplus of products that are being exported at the expense of companies in the US and other countries.

She mentioned the establishment of a forum to address this issue but acknowledged that finding solutions would take time.

Yellen compared the current situation to the challenges faced by the US steel industry in the past, emphasising the negative impact of below-cost Chinese steel flooding the global market.

She stressed that the Biden administration will not allow a repeat of this scenario.

Yellen noted that the issue of excess industrial capacity is a concern shared by the US’ European allies, Japan, Mexico, the Philippines, and other emerging markets.

She emphasised the importance of addressing this issue to protect American and foreign firms from unfair competition.