Some notes & quotes from recent reads:
Yellen Says Nothing Off Table in Response to China Overcapacity
Quotes:
Treasury Secretary Janet Yellen said the US wouldn’t take “anything off the table” in response to China’s manufacturing capacity, including the possibility of additional tariffs to stem what she has described as a flood of cheap goods into the US market.
Chinese leaders have been pouring money into manufacturing, focusing on new industries such as electric vehicles, batteries and renewable energy as China looks for new sources of growth for its slowing economy.
President Joe Biden’s administration has tightened US measures to deny China advanced technology and has signaled it’s exploring tariff increase on Chinese EVs. The EU has launched a probe into subsidies for electric vehicles manufactured in China.
Notes:
We’re at a weird moment in which pretty much every government is scrambling to deploy solar panels and electric vehicles as rapidly as possible, and in which China is making just a silly volume of exactly these things, but in which those governments are also keen to avoid giving China a whammy on their economies, crushing their local manufacturers of such things and controlling these booming markets.
Thus, everyone is telling the Chinese, “hey, please stop trying to send all these incredibly cheap goods that our people want to our shores,” and China’s like “no, stop asking,” and these other countries, in response, are threatening to apply new tariffs on those goods to make them more expensive so that they don’t strangle their local manufacturers of solar panels and EVs in the cradle.
All of which could kick off a new round of trade wars and decoupling threats—though we’re still in the negotiation stage, so it may be that some kind of in-between solution is found and agreed upon before new regulations and clamp-downs are applied.
Keep reading with a 7-day free trial
Subscribe to Let's Know Things to keep reading this post and get 7 days of free access to the full post archives.