Yellen: High US tariff wall a 'deeply misguided policy' that would increase prices
Janet Yellen, U.S. Treasury secretary will announce on Thursday that Donald Trump's proposal to wall off the U.S. Economy would be "deeply ill-informed", raising prices for American customers and making U.S. businesses less competitive.
In excerpts from remarks that Yellen will deliver on Thursday afternoon at the Council on Foreign Relations, New York, Yellen said the U.S. can't afford to go back to previous unilateral actions in order to advance their own economic and national-security interests.
Yellen didn't name Trump, but referred instead to Trump's calls for steep tariff increases. Trump has proposed increasing tariffs by 10% to 20% for virtually all U.S. imported goods, and at least 60% for imports from China. He also threatened to impose up to 2000% on specific companies, such as John Deere DE.N, if they moved some production to Mexico.
Trump called tariffs the "most beautiful word" in the world on Wednesday, arguing they would boost U.S. Manufacturing growth.
Treasury CFR excerpts: "Those who call for a wall around America with high tariffs against friends and competitors or even by treating our closest allies like transactional partners, are misguided," Yellen stated. Tariffs that are not targeted would increase prices for American families, and make businesses less competitive.
Yellen stated that a "go it alone approach" to foreign and economic policies, like the one Trump took when he was president, would make it impossible for U.S. national security and economic interests to be advanced today. This includes pressing Russia to stop its invasion of Ukraine or improving supply chain security, as well as addressing China's aggressive economic policies.
Yellen emphasized that a stronger economic relationship was needed with China but argued in favor of maintaining ties.
"Trade with China and investments can be a significant benefit to American workers and firms, and they must continue," Yellen stated. "But, we must also have a healthy relationship in terms of an economic relationship that is based on equal playing fields."
Barriers to China's market and unfair business practices pose challenges to American businesses and workers, as well as foreign companies looking to do business in China. Yellen added that these policies fuel excess industrial capacity, threatening American firms, and keeping foreign producers dependent upon Chinese supply chains.
Yellen defended Joe Biden’s tariff increases against strategic Chinese imports, such as solar cells, semiconductors, and electric vehicles. She added that U.S. ally countries are also taking similar measures.
She said that the growing consensus on international issues is a strong signal to China, telling it that they must change their practices.
(source: Reuters)
