U.S. Treasury Secretary Janet Yellen testifies during a hearing of the House Appropriations Committee Financial Services and General Government Subcommittee at the Rayburn House Office Building on Capitol Hill in Washington, DC, March 21, 2024.
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U.S. Treasury Secretary Janet Yellen warned on Wednesday that China is treating the global economy as a dumping ground for cheap clean energy products, driving down market prices and squeezing U.S. green manufacturing
“I’m worried that China’s overcapacity will have spillover effects around the world,” Yellen said in a speech at Suniva, a solar company in Georgia. “China’s overcapacity distorts global prices and production patterns, harming U.S. businesses and workers and hurting businesses and workers around the world.”
China has a surplus of solar energy, electric vehicles and lithium-ion batteries that can be shipped to other countries more cheaply. That makes it difficult for green manufacturing in its infancy in the United States and elsewhere to compete.
Yellen said she plans to press Chinese officials on these trade practices during her upcoming visit to China.
“I plan to make this a key issue for discussion during my next visit,” she said. “I will urge my Chinese counterparts to take necessary measures to resolve this issue.”
The secretary’s concerns come as the White House seeks to build a thriving clean energy industry domestically with investments from the Inflation Reduction Act of 2022 and other legislation, including the CHIPS and Science Act.
Yellen has often touted the benefits of these investments, including in another recent speech in which she doubled down on the IRA-fueled 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 on Wednesday.
Meanwhile, China has invested billions of dollars in clean energy over the years, leading the rest of the world in its energy transition.
Yellen added that the more China’s clean energy glut disrupts global market prices, the worse supply chains for these energy industries will become.
“President Biden is committed to doing everything we can to protect our industry from unfair competition,” Yellen said.
The Chinese Embassy in Washington did not immediately respond to a request for comment.
Yellen’s comments underscored the persistence of trade tensions between the United States and China, even as both countries work to stabilize relations.
President Joe Biden met with Chinese President Xi Jinping in November, extending an olive branch to try to break the impasse after years of tensions stemming in part from the tariff war launched by former President Donald Trump.
Trump has proposed reinstating high tariffs on Chinese products if he wins a second term.
Since Biden’s meeting with Xi, efforts to strengthen U.S.-China ties have proven shaky due to ongoing cybersecurity and trade concerns.
In February, Biden launched an investigation into China’s smart cars, which he said posed a national security risk because they connected to U.S. infrastructure when driving on U.S. roads.
“China is determined to dominate the future of the auto market, including through unfair practices,” Biden said in a February statement. statement. “China’s policies could flood our market with cars, posing risks to our national security. I will not let that happen on my watch.”
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