During an interview with CNBC released on Monday, Treasury Secretary Janet Yellen stated that “the great majority of” trade between the U.S. and China “is uncontroversial” and she’s working to ensure that the geopolitical relationship and national security worries won’t trump the economic relationship and “we don’t have an unintended escalation of tensions, that we understand one another’s red lines, we avoid misunderstandings, and we preserve economic interactions that are beneficial to both sides.”
CNBC host Sara Eisen asked, “Should American companies be reducing their exposure to China on a manufacturing basis?”
Yellen answered, “Look, I think trade and investment between China and the United States is valuable. Many American companies are doing excellent business in China, have been here for a long time. The same is true of Chinese companies in the United States, and this trade is beneficial and the great majority of it is uncontroversial. And I think we should not do anything to impede that trading and investment relationship.”
Yellen continued, “But in areas where we have national security concerns, as we have clearly demonstrated, we stand ready to act to protect our national security. That may mean export controls or other interventions, and we try to target those narrowly so that they don’t have broad-based impact on China’s economy as a whole. And we feel strongly and have agreed with the Chinese that we need a level playing field. Now, when we interfere, when we have regulations that affect our trade and investment with China, if it’s national security or other reasons, we go through an open and transparent rule-writing process. We put out proposed regulations, we accept comments, the Chinese have the opportunity to comment, we take the input, and we write regulations. It’s very clear what we’re doing. In China’s case, often, the support, we believe, there’s maybe often a lot of support in ways that are not transparent, and that really is a meaningful difference. But we’re not trying to stifle trade and investment broadly speaking. So, I would not want to advise American firms, don’t do business in China.”
Eisen followed up, “But if I’m Tim Cook of Apple and looking at the geopolitical relationship and the national security concerns, ultimately, won’t that trump the economic relationship?”
Yellen responded, “Well, the purpose of the dialogue that I’ve been involved with now for well over a year with our Chinese counterparts is intended to make sure that that does not happen, that we don’t have an unintended escalation of tensions, that we understand one another’s red lines, we avoid misunderstandings, and we preserve economic interactions that are beneficial to both sides. We manage our relationship. We need to manage it responsibly so that both sides can continue to benefit.”
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