U.S. Treasury Secretary Issues Trade Warning To China

As Reuters reported, last week U.S. Treasury Secretary Janet Yellen issued a strong warning to the Chinese government about its trade practices. While the secretary did not propose any new actions or penalties that would affect the industrial metals sector, she noted how China’s past efforts and policies have harmed the North American steel sector.

Specifically, Secretary Yellen told a press conference that U.S. President Joe Biden would not allow a repeat of the “China shock” of the early 2000s, when she says a flood of Chinese imports into the United States destroyed approximately two million U.S. manufacturing jobs.

Secretary Yellen accused the Chinese government of overinvesting in built factory capacity for batteries, solar panels, and other green energy goods. “We’ve seen this story before,” Secretary Yellen told reporters. “Over a decade ago, massive PRC [People’s Republic of China] government support led to below-cost Chinese steel that flooded the global market and decimated industries across the world and in the United States.” Secretary Yellen also pledged that she has “made it clear that President Biden and I will not accept that reality again.”

Chinese officials were quick to respond. Vice Finance Minister Liao Min told Chinese media that the government “has fully responded” to U.S. questions about overcapacity and that China’s “current competitive advantages are rooted in China’s large-scale market, complete industrial system and abundant human resources.”