It’s time for U.S. allies to step up.
Chinese overcapacity poses a global threat and requires urgent action from the world’s market-driven economies. During a press conference on Thursday, Treasury Secretary Janet Yellen called on the Group of 7 (G7) finance ministers to discuss how China’s industrial overcapacity has harmed their countries and how to push China to curtail it.
“Beijing is clearly seeking to export its economic problems in a way that will harm the global economy,” Alliance for American Manufacturing President Scott Paul said. “For decades, China has stoked its industrial overcapacity to quash its global competition, imperiling the livelihoods of workers in America and other market-driven economies worldwide. The U.S. has already taken substantial measures to counter this threat, but it’s time for the G7 to establish a united front as Secretary Yellen suggests.”
The U.S. Trade Representative announced on May 14 that it will impose Section 301 tariff increases on an array of Chinese products in critical sectors, with some taking effect on Aug. 1, in part to prevent a “China Shock 2.0.”
“A tariff wall against Chinese imports and the countries China utilizes to circumvent trade actions is entirely appropriate in this case,” Paul said. “Our allies must understand that this is a challenge the World Trade Organization cannot and will not solve.”