Yellen once again made it clear that decoupling between China and the United States is an impossible tariff

On the 7th, US Treasury Secretary Yellen, who is currently visiting China, stated that the US is not seeking to "decouple" from China, but is seeking "diversification". The relevant person in charge of the Chinese Ministry of Finance stated that the essence of China US economic and trade relations is mutual benefit and win-win, and there are no winners in trade wars or "decoupling and chain breaking".

On July 7th, visiting US Treasury Secretary Yellen made it clear again during a meeting with representatives from the US business community that the US is not seeking to "decouple" from China.

US Treasury Secretary Yellen

If the two largest economies in the world decouple, it will bring significant instability to the global economy. It is also impossible to achieve decoupling between China and the United States.

Yellen: The First Woman in the United States to Serve as Chairman of the Federal Reserve and Secretary of the Treasury

Yellen arrived in Beijing on the afternoon of the 6th. This is another ministerial official of the Biden administration who visited China after Secretary of State Antony Blinken. Yellen is also the first U.S. Treasury Secretary to visit China in four years.

Yellen, who is currently 76 years old, has been engaged in economic research for a long time and has taught at multiple universities such as Harvard University; During Obama's tenure, Yellen became the first woman in American history to serve as the chairman of the Federal Reserve; In November 2020, Biden nominated Yellen as Secretary of the Treasury, with her term starting in January 2021. Yellen set a new record and became the first female Secretary of the Treasury in the United States.

The US provoked a trade conflict with China in July 2018 and has yet to lift tariffs

It is worth noting that on July 6, five years ago, the United States provoked a trade conflict with China. On July 6, 2018, local time, the US government imposed a 25% import tariff on Chinese goods worth $34 billion under Section 301 of the 1974 Trade Act; On the same day, China imposed a 25% import tariff on American products of the same size.

Afterwards, the Trump administration imposed multiple rounds of tariffs on Chinese goods, and the Chinese side took countermeasures separately; Since taking office in January 2021, the Biden administration has not yet lifted the additional tariffs. According to the Peterson Institute for International Economics, a think tank in Washington, approximately 66.4% of Chinese goods imported to the United States are currently subject to tariffs; Before the trade conflict, the average tariff level imposed by the United States on Chinese goods was only 3.8%; After multiple rounds of tariffs, this number has significantly increased to 19.3%.

The total trade volume between China and the United States has reached a new high, and there has been a change in the structure of Chinese goods exported to the United States

According to data released by the General Administration of Customs of China, the bilateral trade volume between China and the United States decreased in 2019 and 2020 compared to 2018; But in 2021, there was a significant rebound and a record high was reached for two consecutive years.

On the other hand, there have been new changes in trade between China and the United States: research from American think tanks also shows that from 2017 to 2022, the export value of goods subject to a 25% tariff on China's exports to the United States has significantly decreased, including chips, furniture, and some household appliances; The export value of goods subject to a 7.5% tariff has slightly decreased, mainly clothing and shoes; The export value of goods that have not been subject to tariffs is showing an upward trend.

According to relevant laws and regulations, the Office of the United States Trade Representative initiated the review of tariffs in May 2022. US Deputy Trade Representative Bianchi revealed in May this year that the relevant work is expected to be completed by the end of the year.

Yellen has repeatedly stated that he should consider reducing or canceling the additional tariffs on China

According to US media reports, Yellen has repeatedly publicly stated that part of the cost of tariffs on China is borne by the United States, which has harmed American businesses and consumers; From the perspective of alleviating inflation, consideration should be given to reducing or canceling additional tariffs.

US Treasury Secretary Yellen

We are carefully reviewing our trade strategy with China and it is indeed worth considering. Of course, we are doing our best to deal with inflation.

Foreign media: There is disagreement within the Biden administration on whether to lift tariffs on China

However, Reuters revealed that there has been no consensus within the Biden administration on whether to lift tariffs on China: a faction led by Yellen supports adjusting tariffs, while another faction led by trade representative Daisy believes that tariffs should continue to be used as a tool to pressure China.

Frequent visits by senior US officials to China, Biden vigorously promotes economic policies in China

At the time when senior officials such as Antony Blinken and Yellen successively visited China, US President Biden was vigorously promoting his economic policies in the US. On the 6th, he once again made remarks on "Biden Economics", stating that his goal in taking office is to change the direction of the US economy. The public opinion generally believes that economic policy is likely to become the core issue of the White House debate in 2024.

Previously, Biden mentioned "Biden Economics" for the first time in public on June 28th.

US President Biden

When I was getting on the helicopter this morning, a journalist told me, "I asked you about 'Biden Economics' a long time ago, and you said you had no idea what' Biden Economics' was.". I didn't give the name "Biden Economics" to me. I didn't know it was invented by experts from The Wall Street Journal at the time, but now I am happy to use the term "Biden Economics". Guess what? Biden Economics is working.

Biden: Domestic and foreign companies have announced investments exceeding $490 billion in the United States

According to his own statement, the biggest difference between Biden Economics and the economic policies of previous administrations is the large-scale investment in domestic infrastructure and strategic industries in the United States.

US President Biden

Private enterprises from both domestic and foreign sources have announced investments exceeding $490 billion in the United States.

Driven by the chip industry, the United States has sparked a manufacturing "factory building fever"

According to data released by the US Department of Commerce on July 3rd, manufacturing construction spending in the United States reached a record high of $194.3 billion in May this year, a significant increase of 76.3% year-on-year, continuing the high-speed growth trend since the second half of last year.

The US government has stated that, driven by the policy benefits brought by the Inflation Reduction Act and the Chip and Science Act, construction spending in the computer, electronics, and electronics manufacturing industry has almost doubled compared to early 2022.

Sullivan explains the specific meaning of "risk reduction" towards China

The Financial Times believes that strategic competition with China is a major theme that runs through "Biden economics", and strengthening state intervention and formulating industrial policies are also important components of the United States' "risk reduction" strategy towards China.

Assistant to the President for National Security Affairs Sullivan

What does "de risk" refer to? I think "risk reduction" has three meanings. Firstly, we need to establish reliable and resilient supply chains in key areas such as clean energy and chips, ensuring that we do not rely on any country; Secondly, we need to protect the most cutting-edge technologies, especially those that can be used for military purposes, to ensure that these technologies are not used to harm our security; Thirdly, we need to fundamentally increase investment in domestic industries.

American Scholar: The United States Reembraces Industrial Policy "Ironically and hypocritically"

Stephen Roach, former Chief Economist of Morgan Stanley and Professor at Yale University, recently wrote that in order to compete with China, the United States has embraced industrial policy again, which is extremely ironic and hypocritical: for many years, the United States has criticized China's industrial policy. In fact, a key reason for the US imposing a 301 tariff on China since 2018 is China's implementation of industrial policies.

Experts point out that the US policy of revitalizing industries has a strong protectionist color and is worth being vigilant about.

Expert: The comprehensive return of US industrial policies presents a trend of normalization and institutionalization

Meiqiang Promotes "You'an Outsourcing" - India's First Chip Assembly Factory Starts Construction in August

In addition, the Biden administration will also make building a so-called "diversified and resilient" supply chain an important part of its "risk reduction" strategy towards China; To promote the concept of "friendly outsourcing", Yellen visited countries such as South Korea and India in 2022. According to the Financial Times on July 5th, Ashvini Vaishnau, Minister of Electronics and Information Technology of India, revealed that the country's first chip assembly plant will start construction in August. It is reported that the investor of the project is Micron, the largest storage chip manufacturer in the United States; Including subsidies from the Indian government, the total investment amount is as high as 2.75 billion US dollars.

US media: US plans to expand export controls to China, fearing harm to US companies such as Amazon and Microsoft

According to multiple US media reports, the Biden administration is planning to strengthen export controls against China.

CNBC TV host in the United States

If, as reported by The Wall Street Journal, the Biden administration plans to launch a plan to ban cloud computing companies from providing services to Chinese enterprises, well-known cloud computing service providers such as Amazon and Microsoft may be hit.

According to new regulations, US cloud service providers must apply for permission from the US Department of Commerce before providing relevant business to Chinese companies in the future, according to US media. The Wall Street Journal believes that this means that the scope of US export controls to China will once again expand, no longer limited to the semiconductor sector.

Reporter from CNBC TV in the United States

However, this move may harm cloud computing companies in the United States, such as Amazon, which has a large number of Chinese customers in manufacturing, retail, media, gaming, and other fields. Microsoft's Azure may also be affected as it has a considerable scale of business in China. Both companies also have dedicated websites to attract business to their cloud computing departments.

US media: The Biden administration wants to improve Sino US relations while pursuing "absolute leadership"

Bloomberg pointed out that regulating cloud services is "much more difficult" than monitoring the flow of chips, and it is currently impossible to see how the relevant ban will be enforced. The Biden administration does seem to be making efforts to improve Sino US relations, but at the same time, it is running wild on the path of pursuing absolute leadership.

Musk: China will have strong artificial intelligence capabilities

On July 6th, 2023, the World Artificial Intelligence Conference opened in Shanghai. The number of participating companies and exhibition area at this year's conference are the highest in history, and will focus on showcasing cutting-edge technologies and applications in the fields of large models, chips, and robots. More than 30 new products will be released for the first exhibition.

Famous American entrepreneur Musk attended the conference via video link that day and expressed his admiration for the wisdom and drive of the Chinese people. Once China makes up its mind, it can definitely do a certain industry well, and the artificial intelligence industry is no exception. He believes that China will have strong AI capabilities.

China's Ministry of Commerce Upgrades the Establishment of a Roundtable Conference System for Foreign Funded Enterprises

On July 5th, Chinese Minister of Commerce Wang Wentao presided over a roundtable meeting for foreign-funded enterprises, with representatives from 12 companies including Bayer, MSD, Roche, AstraZeneca, and Pfizer attending. Wang Wentao stated that the Ministry of Commerce has upgraded and established a roundtable meeting system for foreign-funded enterprises on the basis of the existing normalized exchange mechanism, further expanding channels for collecting issues and listening to suggestions, timely responding to and solving enterprise concerns, and assisting foreign-funded enterprises in long-term and stable development in China.

Analysis: China and the United States should strive to make the cooperation list longer and longer

Analysis suggests that the United States holds a wrong understanding of China, formulates wrong policies towards China, and drags China US relations to the lowest point since the establishment of diplomatic relations. The responsibility for the problem is clear. The recent interaction mode between China and the United States has brought a cool breeze to the anxious atmosphere of Sino US relations, enhancing the positive expectations of the international community for the improvement of future Sino US relations. The return of China US relations to the right track will make the world more prosperous. Both parties should strive to make the cooperation list longer and longer, rather than shorter and shorter.

New Media of China Central Television's Mandarin Global Program Center