U.S. Treasury Secretary Janet Yellen testifies during a hearing before the Subcommittee on Financial Services and General Government of the House Appropriations Committee in the Rayburn House office building on Capitol Hill on March 21, 2024 in Washington, DC.
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Treasury Secretary Janet Yellen warned on Wednesday that China is treating the global economy as a dumping ground for its cheaper clean energy products, driving down market prices and squeezing green manufacturing in the US.
“I’m worried about the global spillovers from the overcapacity we’re seeing in China.” Yellen he said during a speech at a solar energy company in Georgia called Suniva. “China’s overcapacity distorts global prices and production patterns and hurts American businesses and workers, as well as businesses and workers around the world.”
China has a surplus of solar power, electric vehicles and lithium-ion batteries that it can ship to other countries at cheaper prices. This makes it difficult for the more adolescent green manufacturing industries in the US and elsewhere to compete.
Yellen said she plans to press Chinese officials about these trade practices during her upcoming visit to China.
“I intend to make it a main topic of discussion during my next trip there,” he said. “I will press my Chinese counterparts to take the necessary steps to address this issue.”
The secretary’s concerns come as the White House tries to build a growing domestic clean energy industry with investments from the Inflation Reduction Act of 2022, along with other legislation like CHIPS and the Science Act.
Yellen has regularly touted the gains from these investments, including in another recent speech where she doubled down on the IRA-fueled electric vehicle “boom.”
But these investments are playing catch-up with China’s government.
“The Biden administration also recognizes that these investments are new,” Yellen said Wednesday.
Meanwhile, China has been pouring billions into clean energy for years, outpacing the rest of the world in the energy transition.
Yellen added that the more China’s clean energy glut interferes with global market prices, the worse supply chains for those energy sectors will be.
“President Biden is committed to doing everything we can to protect our industries from unfair competition,” Yellen said.
The Chinese embassy in Washington refuted the notion that there is an overabundance of Chinese clean energy products.
Yellen’s comments underscore ongoing US-China trade tension, even as the two countries try to maintain stable relations.
President Joe Biden met with Chinese President Xi Jinping in November as an olive branch attempt to break the ice after years of tension, marked in part by a tariff war launched by former President Donald Trump.
Trump has called for reinstating significant levels of tariffs on Chinese goods if he wins a second term as president.
In the time since the Biden-Xi meeting, strengthening US-China relations has proven a precarious endeavor due to ongoing concerns over cyber security and trade.
In February, Biden launched an investigation into Chinese smart cars, which he said pose a national security risk because they connect to US infrastructure when they drive on American roads.
“China is determined to dominate the future of the auto market, including through the use of unfair practices,” Biden said in February. statement. “China’s policies could flood our market with its vehicles, posing risks to our national security. I’m not going to allow that to happen in my view.”