Treasury Secretary Janet Yellen has been at the fore of a Biden administration faction prioritizing engagement with China, arguably over holding Beijing accountable for its economic manipulation.
Treasury Secretary Janet Yellen last week outlined three objectives for her agency’s engagement with China next year and announced that she will visit the nation in 2024, a signal the Biden administration is working to ease tensions with China.
But while direct engagement with China isn’t necessarily a bad thing — the U.S. and China’s militaries should probably talk to each other, for example — Yellen’s plans do raise alarm bells for those of us who favor a tougher approach with China on trade issues.
During a speech at the U.S.-China Business Council’s 50th anniversary dinner in Washington, D.C., Yellen said that she plans “to pursue a healthy economic relationship with China” rather than decouple, “continue pressing for clarity on China’s economic policies and policymaking to better inform our own decision-making,” and find opportunities to cooperate on global issues like climate change.
The Treasury Secretary has often been at the fore of a faction within the Biden administration that prioritizes easing the U.S.-China relationship, arguably at the cost of America’s economic stability. In July, following Yellen’s trip to China, Chinese commentators suggested that the secretary considered relaxing Section 301 tariffs that had been imposed under the Trump administration. Those tariffs are still under review.
Yellen acknowledged that “American workers and firms have not been able to compete on a level playing field with those in China. The [People’s Republic of China] deploys economic practices, from non-market tools, to barriers to access for foreign firms, to coercive action against American companies. These policies harm American workers and firms.” This echoes U.S. Trade Representative Katherine Tai’s recent remarks that the global economy is “quite unfair,” and that trade action is a critical part of responding to that imbalance.
But Yellen continues to signal that she prioritizes learning more information about Beijing’s economic practices as opposed to responding more fully to it.
“As I’ve said before, America’s fundamental economic strength means that we have nothing to fear from healthy economic competition, with China or any other country,” Yellen said. “Our strength positions us to seek new opportunities while navigating challenges. It’s within this context that we’ve shaped our economic approach to China.”
America’s workers can indeed compete with anyone in the global economy, but not if undercut by heavily state-subsidized industries that price their products at well below the cost of production, as has been the case notably with the steel and solar industries. The United States must continue to seek communication with China, but not at the cost of our economic strength and national security.
Here at the Alliance for American Manufacturing, we support the worker-centered approach put into action by officials like Tai, who said at our recent 2023 Made in America Holiday Gift Guide event that U.S. policy can no longer favor corporate leaders at the top while leaving workers behind.
“That is the bedrock for our approach to trade,” Tai said. “No more trickle-down, no more top-down; we have to harness that power of our trade policies to reinforce the power of our workers, the power of our ability as an economy to make things.”