Yellen says US, Europe must respond jointly to China's industrial overcapacity

U.S. Treasury Secretary Janet Yellen said that the United States and Europe needed to respond to China’s industrial policies in a “strategic and united way” to keep manufacturers viable on both sides of the Atlantic

U.S. Treasury Secretary Janet Yellen said on May 21 that the United States and Europe needed to respond to China's industrial policies in a "strategic and united way" to keep manufacturers viable on both sides of the Atlantic.

In remarks on the importance of the U.S.-European alliance in Frankfurt, Ms. Yellen said China's excess industrial capacity threatened both American and European firms as well as the industrial development of emerging market countries.

"China's industrial policy may seem remote as we sit here in this room, but if we do not respond strategically and in a united way, the viability of businesses in both our countries and around the world could be at risk," she said.

Her comments come a week after the Biden administration announced steep new tariffs on Chinese electric vehicles (EVs), solar products, semiconductors, battery parts, steel and other strategic industries.

She had warned Chinese officials in April that the U.S. would not accept their excess production of these goods that would flood global markets with cheap exports.

Ms. Yellen, who received an honorary degree from the Frankfurt School of Finance and Management, said the European Union and other countries were taking similar actions to use their own authorities to investigate potential trade remedies for Chinese EVs and other products.

Ms. Yellen also called for Europe and the U.S. to stand together against Russian aggression and Iranian "support for terrorism", including agreeing on a way to unlock the value of some $300 billion worth of frozen Russian sovereign assets to aid Ukraine.