U.S. Treasury Secretary Janet Yellen testifies during a hearing before the Financial Services and General Government Subcommittee of the House Appropriations Committee, at the Rayburn House Office Building on Capitol Hill, March 21, 2024 in Washington, DC.
Alex Wong | Getty Images
Treasury Secretary Janet Yellen warned Wednesday that China is treating the global economy as a dumping ground for its cheaper clean energy products, driving down market prices and stifling green industry in the United States.
“I am concerned about the global fallout from the excess capacity we are seeing in China,” Yellen said in a speech to a Georgia solar company called Suniva. “China’s overcapacity distorts global prices and production patterns and harms American businesses and workers, as well as businesses and workers around the world.”
China has a surplus of solar power, electric vehicles and lithium-ion batteries that it can ship to other countries at lower prices. This makes it difficult for younger green manufacturing industries in the United States and elsewhere to compete.
Yellen said she plans to press Chinese officials about these business practices during her upcoming visit to China.
“I intend to make this a key topic of discussion during my next trip there,” she said. “I will put pressure on my Chinese counterparts to take the necessary measures to resolve this problem.”
The secretary’s concerns come as the White House attempts to build a booming clean energy industry domestically with investments from the Inflation Reduction Act of 2022, as well as other legislation such as the CHIPS and Science law.
Yellen has regularly touted the gains from these investments, including during another recent speech in which she doubled down on the IRA-spurred electric vehicle “boom.”
But these investments are catching up with the Chinese government.
“The Biden administration also recognizes that these investments are new,” Yellen said Wednesday.
Meanwhile, China has been investing billions in clean energy for years, outpacing the rest of the world in its energy transition.
Yellen added that the more China’s clean energy glut interferes with global market prices, the worse the supply chain situation for these energy sectors will become.
“President Biden is committed to doing everything in his power to protect our industries from unfair competition,” Yellen said.
The Chinese Embassy in Washington has denied the suggestion that there is an excess of Chinese clean energy products.
Yellen’s comments highlight ongoing trade tensions between the United States and China, even as the two countries attempt to stabilize their relationship.
President Joe Biden met with Chinese President Xi Jinping in November as part of a concerted effort to break the ice after years of tensions, marked in part by a tariff war launched by former President Donald Trump.
Trump has considered reinstating significant levels of tariffs on Chinese goods if he wins a second presidential term.
Since the Biden-Xi meeting, strengthening U.S.-China relations has proven a precarious effort due to ongoing concerns over cybersecurity and trade.
In February, Biden launched an investigation into Chinese smart cars, which he said pose a national security risk because they connect to U.S. infrastructure while traveling on U.S. roads.
“China is determined to dominate the future of the auto market, including through the use of unfair practices,” Biden said in a February statement. “China’s policies could flood our market with its vehicles, posing risks to our national security. I will not let that happen on my watch.”
cnbc
