US Treasury Secretary Janet Yellen has cautioned that China is using the global economy as a dumping ground for its cheaper renewable energy products, lowering market prices and hurting green manufacturing in the United States.

“I am concerned about global spillovers from the excess capacity that we are seeing in China,” Yellen said during a speech at a Georgia solar company called Suniva. “China’s overcapacity distorts global prices and production patterns and hurts American firms and workers, as well as firms and workers around the world.”

China has a surplus of solar power, electric vehicles, and lithium-ion batteries that it can sell to other countries at lower costs. This makes it challenging for the nascent green manufacturing industries in the United States and worldwide to compete.

Yellen stated that she plans to put pressure on Chinese officials on these trade practices during her future visit to China.

“I plan to make it a key issue in discussions during my next trip there,” she said. “I will press my Chinese counterparts to take necessary steps to address this issue.”

The secretary’s concerns come as the White House works to establish a thriving domestic clean energy economy with investments from the 2022 Inflation Reduction Act, as well as other measures such as the CHIPS and Science Act.

Yellen has frequently extolled the benefits of these investments, including a recent speech in which she doubled down on the electric vehicle “boom” fueled by the IRA.

However, these investments are catching up with the Chinese government.

“The Biden Administration also recognizes that these investments are new,” Yellen said Wednesday.

Meanwhile, China has been investing billions of dollars in clean energy for years, much surpassing the rest of the globe in the energy shift.

Yellen also stated that the more China’s renewable energy surplus disrupts global market prices, the worse off supply chains for these energy industries will be.

“President Biden is committed to doing what we can to protect our industries from unfair competition,” Yellen said.

The Chinese Embassy in Washington did not immediately respond to a request for comment.

Yellen’s comments underline continued trade tensions between the United States and China, despite efforts to improve relations.

President Joe Biden met with Chinese President Xi Jinping in November in an olive branch effort to break the ice after years of conflict, fueled in part by former President Donald Trump’s tariff fight.

If Trump wins a second term, he has threatened to reimpose substantial tariffs on Chinese products.

Since the Biden-Xi meeting, efforts to enhance US-China relations have proven tenuous due to unresolved cybersecurity and trade issues.

Biden began a probe into Chinese smart cars in February, alleging that they represent a national security concern since they connect to US infrastructure while driving on American roadways.

“China is determined to dominate the future of the auto market, including by using unfair practices,” Biden said in a February statement. “China’s policies could flood our market with its vehicles, posing risks to our national security. I’m not going to let that happen on my watch.”

(Adapted from FT.com)

Categories: Economy & Finance, Geopolitics, Strategy