Yellen Says China Trade Deal Has ‘Hurt American Consumers’
The Treasury secretary said an agreement made by the Trump administration, which remains under review, had failed to address fundamental problems between the two countries.
By Alan Rappeport and Keith Bradsher
WASHINGTON — Treasury Secretary Janet L. Yellen has cast doubt on the merits of the trade agreement between the United States and China, arguing that it has failed to address the most pressing disputes between the world’s two largest economies and warning that the tariffs that remain in place have harmed American consumers.
Ms. Yellen’s comments, made in an interview with The New York Times this week, come as the Biden administration is seven months into an extensive review of America’s economic relationship with China. The review must answer the central question of what to do about the deal that former President Donald J. Trump signed in early 2020 that included Chinese commitments to buy American products and reform its trade practices.
Tariffs that remain on $360 billion of Chinese imports are hanging in the balance, and the Biden administration has said little about the deal’s fate. Trump administration officials tried to create tariffs that would shelter key American industries like car making and aircraft manufacturing from what they described as subsidized Chinese exports.
But Ms. Yellen questioned whether the tariffs had been well designed. “My own personal view is that tariffs were not put in place on China in a way that was very thoughtful with respect to where there are problems and what is the U.S. interest,” she said at the conclusion of a weeklong trip to Europe.
President Biden has not moved to roll back the tariffs, but Ms. Yellen suggested that they were not helping the economy.
“Tariffs are taxes on consumers, in some cases it seems to me what we did hurt American consumers and the type of deal that the prior administration negotiated really didn’t address in many ways the fundamental problems we have with China,” she said.
But reaching any new deal could be hard given rising tensions between the two countries on other issues. The Biden administration warned U.S. businesses in Hong Kong on Friday about the risks of doing business there, including the possibility of electronic surveillance and the surrender of customer data to authorities.
Chinese officials would welcome any unilateral American move to dismantle tariffs, according to two people involved in Chinese policymaking. But China is not willing to halt its broad industrial subsidies in exchange for a tariff deal, they said.
Xi Jinping, China’s top leader, has sought technological self-reliance for his country and the creation of millions of well-paid jobs through government assistance to Chinese manufacturers of electric cars, commercial aircraft, semiconductors and other products.
It might be possible to make some adjustments at the margins of these policies, but China is not willing to abandon its ambitions, said both people, who spoke on condition of anonymity because they were not authorized to discuss the issue publicly.
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