Under the pretext of "overcapacity", US Treasury Secretary Yellen questioned the "wall of opposition" erected by the United States and Europe against China

Globe.com

2024-05-25 07:11Posted on the official account of Beijing Global Network

U.S. Treasury Secretary Janet Yellen claimed on the 23rd local time that the United States and Europe must form a clear united front against China's industrial "overcapacity", and "market-oriented countries" should erect a "wall of opposition" to China's dominantly led industrial policy. Experts interviewed by the "Global Times" on the 24th believe that the United States alone promotes the so-called "overcapacity" issue without achieving results, and wants to attract more countries to join the so-called united front. And from the perspective of a market economy, the United States is taking more and more measures to interfere with the market, and it is the destroyer of market rules.

U.S. Treasury Secretary Yellen Data map Source: Visual China

According to a report by Bloomberg on the 23rd, Yellen spoke before the G7 finance ministers and central bank governors meeting held in Stresa, Italy, claiming that many advanced industrial democracies outside the G7, including Mexico, India and South Africa, are concerned about China's "excessive investment" in electric vehicles, photovoltaic products, semiconductors, steel and other strategic industries. If China does not change its policy, the "market-driven economy" will face a flood of cheap exports from China, which will threaten the viability of its manufacturers. She also declared that she was not asking countries to follow the example of the United States in imposing tariffs, "but we need to stand together and send a unified message to China." In this way, they will understand that it is not just one country that feels this way, and that the strategy they are pursuing faces a 'wall of opposition'. ”

Song Guoyou, deputy director of the Center for American Studies at Fudan University, said in an interview with the Global Times on the 24th that the United States hopes to draw together EU countries, Japan and South Korea and some emerging economies at the G7 finance ministers and central bank governors meeting to further coordinate policies and positions on the so-called "overcapacity" issue. However, judging from recent statements by various parties, the EU is actually not willing to fully agree with the United States, and even if it agrees with some views, the scale of the measures taken may be smaller. Moreover, the China-Japan-ROK summit will be held soon, and some consensus may be reached on relevant issues at that time. The US is trying to force G7 members in the name of "overcapacity", which will actually harm the interests of relevant countries.

Yellen's comments come after the Biden administration announced steep new tariffs on Chinese electric vehicles, lithium batteries, solar cells and other products to protect U.S. investment in developing these industries at home. On the 22nd, the Office of the United States Trade Representative announced that the new import tariffs on electric vehicles and their batteries, semiconductors, steel and aluminum products and a series of products will take effect on August 1 this year. The day before, Yellen urged the European Union and the United States to respond to the "overcapacity" of Chinese industry through a "unified strategic approach" at a conference in Frankfurt, Germany.

However, the EU and some companies have mixed reactions to the US statement and the imposition of tariffs on China. European Commission President Ursula von der Leyen recently said that she would take a "different approach". According to Bloomberg, Volkswagen CFO Arnold Antellitz said that the EU's increase in import tariffs on Chinese-made electric vehicles would only provide a temporary respite, and in the long run, staying competitive must reduce costs. He also said that the EU's plan to increase barriers could provoke painful retaliatory actions and that "it is highly doubtful that the current discussion on tariffs is going in the right direction".

Even in the United States, there are many voices opposing the tariffs. According to Reuters, Tesla founder Elon Musk said on the 23rd that he opposed the United States imposing tariffs on Chinese electric vehicles when attending an event in Paris via video link on the 23rd. "Neither Tesla nor I have asked for these tariffs. In fact, I was surprised when the tariffs were announced. Things that inhibit trading freedom or distort the market are not good. The New York Times also published an article saying that Biden's decision to incorporate Trump's tariffs into law and upgrade them is a clear sign that the United States has ended a decades-long era of embracing trade with China. What is unclear, however, is whether the American public, which is still plagued by the fastest inflation in 40 years, can endure the pain of the transition.

Song Guoyou believes that from the perspective of the internal structure of Europe and the United States, market actors also do not agree with the US government's approach. The United States has a strong political purpose in forcibly hyping up the topic of "overcapacity", but in fact it harms the interests of business people. As a result, companies in the U.S. and within Europe will be unnecessarily impacted, and even if the U.S. and Europe coordinate on the issue of "overcapacity" to a certain extent, they will face more internal obstacles.

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