The U.S. Treasury Secretary Janet L. Yellen expressed her concerns related to the trade agreement that is to happen between China and the United States. According to her, she thinks so as the agreement has failed to provide any long-term pacification on the agreement, which has failed to press the dispute going between both the superpowers.
Yellen’s remarks were made in an interview with The New York Times last week. At the same time, the Biden administration has been conducting a comprehensive review of the US-China economic relationship for seven months. A core question that must be answered during the deliberations is how to deal with the first phase of the US-China trade agreement signed by former President Donald J. Trump in early 2020, including China’s purchase of US products and changes in the agreement which acted as a commitment to domestic trade practices.
The prospect of tariffs still being imposed on US$360 billion worth of Chinese imports is unclear, and the Biden administration is silent on the fate of the first phase of the agreement. Trump administration officials have tried to impose tariffs to protect key US industries such as automobile manufacturing and aircraft manufacturing from what they call China’s subsidized exports. But Yellen questioned the wisdom of enacting these tariffs.
Raising a voice against them, she said after ending her week-long European tour that on a personal level, she feels the imposing tariffs on China have not quite clearly hinted over in which areas there have been problems and in respect to them, what are the interest of United States that it is willing to pacify.
Although President Biden has yet to take action on the removal of tariffs, Yellen said that tariffs would not help the US economy. She remarked, saying that the tariffs are nothing but levied taxes on customers. Further opening up about it, she had expressed her concern over hurting millions of American consumers with the previous government’s attempt at negotiating the agreements with their all-time rival China. According to her, it is a fundamental problem that needs to be resolved soon.
The Biden administration warned US companies in Hong Kong of risks last Friday, including electronic surveillance and the possibility of handing over customer data to the authorities. According to two people who have participated in the formulation of Chinese policy, Chinese officials will welcome any unilateral measures taken by the United States in the removal of tariffs. But they said that China is unwilling to stop large-scale industrial subsidies in exchange for a tariff agreement.
China’s top leader Xi Jinping has been seeking China’s technological self-reliance and through the government’s assistance to domestic manufacturers of electric vehicles, commercial aircraft, semiconductors, and other products, in order to create millions of high-paying jobs.
It may be possible to make some adjustments to the marginal parts of these policies, but China is unwilling to abandon the goals it pursues, the two people familiar with the matter said, and since they were not authorized to discuss this issue publicly, they asked not to be named.
Chinese academic experts, like the government, are skeptical about whether any agreement can be reached quickly or not. Hi Zhi, a trade economist at the Renmin University of China, which is in Beijing, had previously said that it is near to impossible for both countries to reach an agreement, even though both sides return to a table conference.
The Trump administration also tried to convince Chinese officials to disclaim high subsidies to high-tech industries but could not. Trump’s trade representative, Robert E. Lighthizer, eventually adopted tariffs to prevent subsidized Chinese companies from squeezing American companies out of the market.