As Yellen heads to Beijing, China worries that the U.S. is planning more tariffs on green tech

Guangzhou, China — As US Treasury Secretary Janet Yellen calls on Chinese leaders to change their domestic manufacturing policies on the second day of an official visit, state media are receiving her message with skepticism and concern about further US tariffs on green energy products.

Yellen, who began her five-day visit to one of China’s top industrial and export centers, has so far focused on what the US sees as unfair Chinese trade practices in talks with senior Chinese officials.

The official of a pretext for rolling out more protectionist policies to protect American businesses.”

Chinese government subsidies and other policy support have pushed solar panel and electric car makers in China to invest in factories, building far more production capacity than the domestic market can absorb.

The massive scale of production has driven down costs and fueled price wars for green technologies, a boon for consumers and efforts to reduce global dependence on fossil fuels. But Western governments fear this capacity will flood their markets with low-priced exports, threatening American and European jobs.

During extended meetings with Vice Prime Minister He Lifeng on Friday and Saturday, Yellen reiterated that the US “pursues a healthy economic relationship with China that benefits both sides.” She said if China changes its policy to encourage domestic household consumption instead of subsidizing green energy, that “would be something that is in China’s interest and something that is good for the global economy,” she said on Friday during a meeting with the American Chamber of Commerce in China.

Yellen told reporters during a refueling stop in Alaska en route to China that the US “will not rule out” tariffs in response to China’s heavily subsidized production of green energy products.

Xinhua commentary was skeptical of US intentions: “it is now known to the world that Washington will not hesitate to show its protectionist teeth under the guise of national security in areas where its supremacy is challenged.”

The US has made efforts through legislation and executive orders to phase out certain Chinese technologies in order to expand its domestic manufacturing capabilities. Many members of the White House and Congress view the actions as important to maintaining national security.

The $280 billion CHIPS and Science Act was passed in 2022 to boost the semiconductor industry and scientific research in an effort to create more high-tech jobs in the United States and make it more competitive with China. In addition, US President Joe Biden signed an executive order last August to block and regulate high-tech US investments toward China.

Yellen moves to Beijing on Saturday afternoon for more meetings this weekend with senior officials, economists and the governor of the country’s central bank.

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Associated Press Greater China correspondent Ken Moritsugu in Beijing contributed to this report.

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