US Treasury Secretary Janet Yellen pushed back Thursday on Republican presidential candidate Donald Trump’s proposals of high tariffs on allies and rivals, calling such moves “deeply misguided” weeks before the November 5 election.
Her remarks delivered in New York come as Trump vows to impose across-the-board levies on US imports, with a particularly high tariff level on Chinese goods.
The former president is running against Democrat Kamala Harris, whose term in President Joe Biden’s administration has seen more targeted economic policies against countries like China.
“Calls for walling America off with high tariffs on friends and competitors alike or by treating even our closest allies as transactional partners are deeply misguided,” Yellen said in the speech at the Council on Foreign Relations.
Trump has called for a 10 to 20 percent tariff on all imports, and a higher rate of 60 percent or more on those from China.
But Yellen warned that broad, untargeted levies would raise costs for US households and make American businesses less competitive.
The economy has consistently been a top issue for voters, according to polls leading up to the presidential election.
“And we cannot even hope to advance our economic and security interests — such as opposing Russia’s illegal invasion of Ukraine — if we go it alone,” Yellen added.
But the Treasury chief acknowledged that the United States also “cannot simply draw from an old playbook” when facing challenges like global pandemic preparedness, climate change and a need to grapple with China’s industrial overcapacity.
She noted that trade and investment with China can bring gains to US firms and workers, stressing that Washington should aim to have “a healthy economic relationship based on a level playing field.”
“America’s well-being depends on the world’s, and America’s economic leadership is key to global prosperity and security. American isolationism and retrenchment will leave all of us worse off,” she added.
But the Biden administration has not eliminated tariffs earlier imposed by Trump, despite Harris’s criticism of Trump’s proposals as effectively being a sales tax.
Asked about this, Yellen said Washington was looking to Beijing to address practices like unfair competition, which were emphasized in the US trade action.
“China really did not address any of those issues,” Yellen said. “President Biden felt we should not reward China by lowering the tariffs.”
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