‘Significant’ Chinese response to US tariffs possible: Yellen

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Beijing could possibly issue a “significant” response to US tariffs on Chinese goods, Treasury Secretary Janet Yellen said Monday when asked about the prospect of fresh levies.

The United States is reportedly planning to raise tariffs on Chinese clean energy goods such as electric vehicles, batteries and solar products, with an announcement expected this week.

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“President (Joe) Biden believes that anything we do should be targeted to our concerns and not broad-based, and hopefully we will not see a significant Chinese response. But that’s always a possibility,” Yellen told Bloomberg TV in an interview on Monday.

A US decision on tariffs would come at the end of a long-awaited review of levies imposed during a trade war between Washington and Beijing.

The administration of then-president Donald Trump had introduced levies on some $300 billion in goods from China.

Officials have since initiated a review, with the US Trade Representative required to look into the impact of the action -- first introduced in 2018 -- after four years.

In the latest move, set to be announced on Tuesday, levies on EVs are expected to roughly quadruple, according to the Wall Street Journal.

Yellen said on Monday that she did not want to get ahead of any potential announcement on the review.

But she stressed that “the president believes that it’s critically important for the United States to have a role and a presence in strategic industries like semiconductors and like clean energy.”

Those sectors will form the foundation of job creation and national security in the decades ahead, she added.

“He believes it’s unacceptable as I do to be completely dependent on China in these areas,” she said.

During a recent visit to China, Yellen warned about overcapacity in the world’s second biggest economy -- risking a flood of below-cost goods in the global market.

The Biden administration fears that overproduction could deal a blow to burgeoning US industries, especially in green tech.

Noting that China has “enormous subsidies in critical areas of advanced manufacturing,” she said Biden wants to ensure that US stimulus provided through the Inflation Reduction Act to support industries are protected.

Yellen on Monday is visiting Stafford County, Virginia, where she toured a broadband infrastructure project funded by the Biden administration.

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