United States: According to Treasury Secretary Janet Yellen, Former President Donald Trump’s policies towards China left America “more vulnerable and more isolated” in the global economy; she took her shots at the front-runner for the Republican presidential nomination.
In prepared remarks, Yellen said that the Trump administration “failed to invest at home in critical areas like infrastructure and advanced technology while also neglecting relationships with our partners and allies forged and strengthened over decades.”
Yellen’s comments came as the United States has been working to restore its relationship with the Asian superpower, including a November meeting between Chinese President Xi Jinping and US President Joe Biden. The two countries agreed to reduce the production of illegal fentanyl, a hazardous component of narcotics sold to the US and decided to resume military-to-military communications.
Yellen, who seldom discusses the previous administration’s trade policy, stated that Trump’s measures on China “left America more vulnerable and isolated in a competitive global economy that demands that nations take exactly the opposite approach.”
“It damaged our global standing and meant significant missed economic opportunities for American firms and workers,” she was quoted saying, according to the reports by the Associated Press.
Biden’s Course Correction
Yellen cited the Biden administration’s approach of expanding partnerships with like-minded nations through “friend shoring” with South Korea, Vietnam, Japan, India, and Indonesia in her address, which was previewed for the press before the event.
“Over the past three years, the Biden administration has course-corrected,” she said. “We’re investing at home through President Biden’s Investing in America agenda,” citing new laws on infrastructure, climate, and semiconductors, among others.
However, the Biden administration has maintained specific necessary Trump-era measures damaging to China, such as tariffs on Chinese commodities coming into the US.
In May, in an interview with The Wall Street Journal, Yellen stated that the US would not likely cut tariffs.
“I can imagine some adjustments taking place to rationalize the tariff structure, but my sense is the general feeling in the administration is that it’s not appropriate to lower the tariffs,” she said.
Furthermore, over the summer, Biden issued an executive order to control and prohibit high-tech US-based investments flowing to China, a move his Democratic government said was based on national security. In 2022, the United States banned sophisticated computer chip shipments to China.
Eswar Prasad’s Insights
According to Eswar Prasad, a Cornell trade policy scholar, there are significant variations in how the two administrations have addressed the US-China economic relationship.
“The Biden administration has maintained a tough but constructive approach toward China, prioritizing national security considerations but also seeking avenues of cooperation and progress in areas with mutual benefits,” Prasad said, adding, “The Trump administration took a more hostile and aggressive approach that was not tempered by recognizing shared interests between the two countries.”
Service and Goods traded between the US and China generated a massive US$758.4 billion in 2022, as per the US Trade Representative. However, Chinese investment decreased in the US, falling 7.2 percent from the prior year.