In an interview with CNBC published on Monday, Treasury Secretary Janet Yellen said that the “vast majority” of U.S.-China trade is undisputed, and that geopolitical ties and national security concerns are driving the economic situation. He said he tries not to make it a priority. “We have not unintentionally escalated tensions, understood each other’s red lines, avoided misunderstandings, and maintained mutually beneficial economic exchanges.”
CNBC host Sarah Eisen asked, “Should American companies reduce their manufacturing exposure to China?”
Yellen responded: “I think trade and investment between China and the United States is valuable. Many American companies have good business in China and have been located in China for many years. The same goes for Chinese companies in the United States. That’s true, this trade is beneficial, and much of it is indisputable. And I don’t think there should be anything that impedes that trade and investment relationship.”
“But in areas where there are national security concerns, as we have clearly demonstrated, we are prepared to act to protect our national security,” Yellen continued. That could mean export controls and other interventions, which we are trying to narrowly target so as not to have a broader impact on the Chinese economy as a whole. And we feel strongly and agree with the Chinese side that there needs to be a level playing field. Currently, when we intervene, when there are regulations that affect trade or investment with China, whether it’s for national security or other reasons, we go through an open and transparent rulemaking process. . We will submit a draft regulation, accept comments, give Chinese people an opportunity to comment, incorporate opinions, and develop regulations. It’s very clear what we do. In the case of China, a lot of aid is often provided in opaque ways, and we think that’s a really meaningful difference. But broadly speaking, we are not trying to stifle trade and investment. Therefore, I would not advise American companies not to do business in China. ”
Eisen continued, “But if I’m Tim Cook at Apple, and given the geopolitical relationships and national security concerns, wouldn’t that ultimately trump economic relationships? ” he continued.
“Well, the purpose of the dialogue that I’ve been engaged in for over a year with my Chinese counterpart is to make sure that that doesn’t happen, to make sure that there’s no unintended escalation of tensions,” Yellen said. It is to do so.” , we will understand each other’s red lines, avoid misunderstandings, and maintain mutually beneficial economic exchanges. We manage our relationships. It needs to be managed responsibly so that both parties can continue to benefit. ”
to follow Ian Hanchett’s Twitter @Ian Hanchett
