US Treasury Secretary Janet Yellen testifies during a hearing before the Subcommittee on Financial Services and General Government of the House Appropriations Committee at the Rayburn House Office Building on Capitol Hill on March 21, 2024 in Washington, DC.
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Treasury Secretary Janet Yellen warned Wednesday that China is treating the global economy as a dumping ground for cheap clean energy products, depressing market prices and squeezing green manufacturing in the United States.
“I am concerned about the global ramifications of the excess capacity we are seeing in China,” Yellen said during a speech at the Soneva Solar Energy Company in Georgia. “China's excess capacity distorts global prices and production patterns and harms American companies and workers, as well as companies and workers around the world.”
China has a surplus of solar energy, electric cars and lithium-ion batteries that it can ship to other countries at cheaper prices. This makes it difficult for green manufacturing industries in the United States and elsewhere to compete.
Yellen said she intends to press Chinese officials on these trade practices during her upcoming visit to China.
“I intend to make it a major issue in discussions during my next trip there,” she said. “I will press my Chinese counterparts to take the necessary steps to address this issue.”
The secretary's concerns come as the White House tries to build a thriving clean energy industry domestically with investments from the Inflation Reduction Act of 2022, along with other legislation like the CHIPES and Science Act.
Yellen has regularly touted the gains these investments have delivered, including in another recent speech in which she doubled down on the electric vehicle “boom” spurred by the IRA.
But these investments are trying to catch up with the Chinese government.
“The Biden administration also recognizes that these investments are new,” Yellen said on Wednesday.
Meanwhile, China has been pouring billions into clean energy for years, outpacing the rest of the world in the energy transition.
Yellen added that the more China's clean energy abundance overlaps with global market prices, the worse the supply chains for these energy sectors become.
“President Biden is committed to doing everything 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 highlight the ongoing trade tension between the United States and China even as the two countries try to stabilize relations.
President Joe Biden met with Chinese President Xi Jinping in November in an olive branch attempt to break the ice after years of tension, marked in part by former President Donald Trump's tariff war.
Trump proposed reimposing significant levels of customs tariffs on Chinese products if he wins a second presidential term.
In the period following the Biden-Xi meeting, strengthening US-China relations has proven to be a risky effort due to continuing concerns over cybersecurity and trade.
In February, Biden launched an investigation into Chinese smart cars, which he said pose a national security risk because they connect to American infrastructure when they drive on American roads.
“China is determined to dominate the future of the auto market, including by using unfair practices,” Biden said in a statement in February. “China's policies could flood our market with their vehicles, posing risks to our national security. I will not allow that to happen on my watch.”
