Treasury Secretary Janet Yellen says she will “press” her Chinese counterparts to address China’s manufacturing overcapacity for green energy products during her “next trip” to the country.
“In the past, in industries like steel and aluminum, Chinese government support led to substantial overinvestment and excess capacity that Chinese firms looked to export abroad at depressed prices. This maintained production and employment in China but forced industry in the rest of the world to contract,” Ms. Yellen said.
“Now, we see excess capacity building in new industries like solar, EVs, and lithium-ion batteries.”
Ms. Yellen said the Biden administration had raised issues of overcapacity with China in previous bilateral talks.
“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.”
‘Wrecked Too Many Industries in America’
The Alliance for American Manufacturing (AAM), a U.S. manufacturing advocacy group, issued a statement welcoming Ms. Yellen’s effort to address China’s overcapacity.“China’s overcapacity has already wrecked too many industries in America over the past two decades,” AAM President Scott Paul said. “Beijing’s policies and past administrations’ hesitancy to appropriately prevent or respond to the threat left us in a weakened state.
“It’s critical that the Biden administration and Congress proactively deploy existing trade tools and develop new ones to prevent job losses before it’s too late.
“We must also ensure that Chinese companies don’t simply use our trade partners as a back door to the American market, or to distort it by locating minor operations here dependent on the Chinese supply chain in a way that displaces our emerging industries.”
“There is cause for alarm that Chinese vehicles and parts will only increase their access to the U.S. market, overcoming existing tariffs and evading existing trade enforcement measures, to directly challenge domestic automakers and threaten the jobs of millions of American manufacturing workers,” the report reads.
“The solar manufacturing industry is at a crucial turning point, spurred by incentives in the Inflation Reduction Act. During the final two years of the 201 tariffs, it is essential that their implementation supports the growing U.S. solar manufacturing industry, which is critical to our nation’s energy security and energy independence from China,” the letter reads.
“China’s aggressive subsidies for its own solar manufacturing industry demonstrate its intent to control the industry globally,” the letter reads.
“By 2026, China will have enough capacity to meet annual global demand for the next ten years. This capacity is an existential threat to the U.S. solar industry and American energy security.”