Janet Yellen urges EU to join US in curbing cheap Chinese exports

The comments come as the Commission President has suggested that the EU may impose tariffs on Chinese electric vehicles

US Treasury Secretary Janet Yellen has urged the European Union to urgently intervene to curb rising levels of cut-price exports of Chinese green technology, including solar panels and wind turbines.

At the same time, he urged German bank executives on Tuesday to step up efforts to comply with sanctions against Russia and to step up efforts to avoid them.

His comments in Frankfurt came hours after European Commission President Ursula van der Leyen strongly suggested the EU would join the US on Chinese electric vehicles following an investigation into alleged government subsidies to the automobile industry. In China.

Yellen said the U.S. and its Western allies must act in a “coherent way” as China’s growing manufacturing threatens industries in all its markets.

Wind turbine makers in the EU have protested Chinese rivals’ 50% cuts, appealing to cash-strapped state and regional authorities facing greenhouse gas reduction targets.

Yellen has backed 100% tariffs, which have been criticized as protectionist and a potential flashpoint that could trigger wider trade wars with China.

“China’s industrial policy may seem distant as we sit in this room, but if we don’t respond strategically and in unison, the credibility of our countries and companies around the world could be at risk,” Yellen told reporters. conference at the Frankfurt School of Finance and Management on Tuesday.

The EU, which sells a larger share of its exports to China than the US, hopes its approach, which includes investigations into more than 20 trade sectors, will attract Beijing’s attention.

China has signaled it will retaliate against any tariffs with possible tariffs on French brandy, EU wine and dairy products.

Von der Leyen said Europe would take a different approach to America. While tax increases are expected, they are unlikely to match the rate imposed by the US.

Von der Leyen told the Financial Times that China had “massive excess capacity” that had “flooded” the EU market with “artificially cheap products”.

He said he looked forward to the Chinese government’s investigation into subsidies, which began last September and is expected to rule on “excessive manufacturing subsidies” on June 5.

The EU’s response would be “the level of tariffs will correspond to the level of damage caused”, he added, pointing out that the EU would not impose 100% import tariffs.

“This is not about closing the market or protectionism,” he said.

The friction with China comes less than two weeks after President Xi Jinping met with Van der Leyen and French President Emmanuel Macron, hoping to persuade him to cut production levels in China.

Yellen’s message on Russian sanctions is believed to be rooted in new evidence that the US and EU have found that the Kremlin has evaded sanctions, for example, goods ordered by companies in Hong Kong from multinational technology companies end up in Russia.

“Russia is desperate to get essential goods from advanced economies like Germany and the United States,” Yellen said. “We must be vigilant to prevent the Kremlin from providing its defense industrial base and access to our financial systems.”

Originally published by Guardian 05/21/2024 – 12:36 p.m

By Lisa O’Carroll in Brussels