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• Yellen expressed concerns over lockdowns in China, which are affecting global supply chain, and may have spillover effect
• She is advocating within Biden administration for eliminating some tariffs on Chinese imported goods
US Treasury Secretary Janet Yellen on Wednesday said the COVID-19 lockdown in China is hampering global supply chains, and a broader slowdown in growth in the world's second-largest economy could have global spillover effects.
"Certainly the lockdowns look like they are impeding the production and flow of goods and services, given how extensive they are, and compounding supply chain difficulties that we have had that have boosted prices," Yellen told reporters at a press conference before meeting the finance officials of the Group of Seven (G7) countries, in Germany.
"Although some of those pressures seem to be mitigating, the developments in China exacerbate those supply-chain pressures," she said. "And so that's a source of concern."
Moreover, there is also a growing concern regarding the sluggishness in the Chinese economy that has primarily arisen from its zero-COVID policy, which prompted the local governments to shut down activity in major domestic economic hubs for weeks.
"China also seems to be experiencing a slowdown in growth. As one of the largest economies in the globe, China's economic performance really has spillover impacts on growth all around the world," Yellen said.
"So that is a factor that affects the global outlook, and we're monitoring carefully what happens in China and what their policy responses are."
Yellen said she is advocating within the Biden administration for doing away with the punitive "Section 301" tariffs imposed by former US President Donald Trump on hundreds of billions of dollars in Chinese imported goods.
"Some of them, to me, seem as though they impose more harm on consumers and businesses and aren't very strategic in the sense of addressing real issues we have with China," she said, referring to unfair trade practices and national security issues or supply chain vulnerabilities.
Input from Reuters
Picture Credit: Politico
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