Yellen Criticizes Trump’s China Trade Policy, Tariffs

By Emel Akan
Emel Akan
Emel Akan
reporter
Emel Akan is White House economic policy reporter in Washington, D.C. Previously she worked in the financial sector as an investment banker at JPMorgan and as a consultant at PwC. She graduated with a master’s degree in business administration from Georgetown University.
July 21, 2021 Updated: July 21, 2021

WASHINGTON—Treasury Secretary Janet Yellen has questioned the merits of tariffs imposed by the Trump administration on billions of dollars of Chinese goods, stating that they’ve harmed U.S. consumers.

Yellen is the first Biden official to criticize the existing tariffs, and her comments raise the question of whether the White House is preparing to change course on the country’s trade policy with China.

“My own personal view is that tariffs were not put in place on China in a way that was very thoughtful with respect to where there are problems and what is the U.S. interest,” Yellen said in an interview with The New York Times last week.

President Joe Biden kept the tariffs on nearly $360 billion worth of Chinese goods that were enacted by the Trump administration. But he also launched a comprehensive review of the “phase 1” trade agreement signed with Beijing in early 2020.

“Tariffs are taxes on consumers,” Yellen said. “In some cases, it seems to me what we did hurt American consumers, and the type of deal that the prior administration negotiated really didn’t address in many ways the fundamental problems we have with China.”

It’s unclear whether the Biden administration has concluded its review and would lift the existing tariffs soon. Representatives for the administration didn’t immediately respond to a request by The Epoch Times for comment on Yellen’s remarks.

The phase one trade deal signed in January last year under the Trump administration requires Beijing to buy $200 billion worth of additional U.S. goods and services during the two-year period of 2020 and 2021. Analysis of Chinese trade data by the Peterson Institute for International Economics shows that China has met about 58 percent of its purchase target in 2020 and 69 percent through May 2021.

The Trump administration repeatedly said that tariffs on Chinese goods were justified to address China’s unfair trade policies, including intellectual property theft, forced technology transfers, government subsidies for domestic companies, and restricting foreign access to Chinese markets.

During the signing of the phase one agreement, then-President Donald Trump said he would retain tariffs on Chinese goods as leverage for the next round of talks. After the pandemic, however, he expressed hesitation about negotiating a new agreement with China, especially after Beijing’s mishandling of the COVID-19 outbreak.

Biden and his international trade team indicated that there would be no immediate changes to U.S. trade policy.

Companies and trade associations have been pushing hard against tariffs imposed by the Trump administration. More than 6,000 American companies, including Ford, Tesla, and Home Depot, filed lawsuits in the U.S. Court of International Trade seeking to upend the tariffs on Chinese goods.

A group of companies sent a letter to Biden asking him to settle the litigation. They stated that the levies “are not tough on China” but “are tough on U.S. companies, U.S. workers, and consumers who have paid these tariffs as a tax out of their own pockets.”

Yellen’s comments echoed concerns raised by those importers.

In a court filing, the Biden administration asked the court to dismiss the complaints against the tariffs, saying that they were lawfully imposed.

During her confirmation hearing in January, Yellen assured lawmakers that the administration would “take on the challenge of China’s abusive, unfair, and illegal practices.”

It’s unclear whether the Biden administration would remove the tariffs without receiving concessions from Beijing.

Some trade experts have expressed skepticism about whether the Chinese regime can truly commit to structural reforms. Some also believe that the Biden team, compared to the previous administration, has been less explicit about how it would slow China down and challenge its unfair trade practices.

Emel Akan
Emel Akan
reporter
Emel Akan is White House economic policy reporter in Washington, D.C. Previously she worked in the financial sector as an investment banker at JPMorgan and as a consultant at PwC. She graduated with a master’s degree in business administration from Georgetown University.