Treasury Secretary Janet Yellen on Tuesday called for the modernization of world trading practices in order to be less dependent on countries like China for products, which she said has "benefited enormously" from the current system.
Driving the news: "We cannot allow countries like China to use their market position in key raw materials, technologies or products to disrupt our economy or exercise unwanted geopolitical leverage," Yellen said in a speech in Seoul.
- Beijing "has directed significant resources to seek a dominant position in the manufacturing of certain advanced technologies, including semiconductors, while employing a range of unfair trade practices to achieve this position," Yellen said.
Zoom in: During her speech at an LG Group-run research and development complex, Yellen urged allies to work closely together in "friend-Shoring" to diversify and insulate global supply chains from disruptions and "address the real problems that have emerged, including the unfair Chinese practices that damage our national-security interests."
- The U.S. and South Korea "share a common goal of a free and open Indo-Pacific," Yellen said. "But achieving it will take resolute action."
Our thought bubble, via Axios' Felix Salmon: This less-than-subtle shot across Beijing's bow from the Biden administration's top economist makes it clear that the Trump-era sanctions on China won't be lifted any time soon.
Worth noting: Yellen, who's been critical of Beijing's relationship with Moscow during the invasion of Ukraine, said supply chain resilience had been a key focus of the Biden administration in its response to both the war and the pandemic — which she said had "redrawn the contours of global supply chains and trade."
- She also accused the Kremlin of weaponizing economic integration by "threatening to spark a global food crisis by blocking ports in Ukraine," noting the invasion "has already caused energy prices to rise in America and across the world."
