Among the cabinet members flanking US President Joe Biden Monday night in his video summit with Xi Jinping, Chinese state media noted, was the administration’s most vocal China dove, Treasury Secretary Janet Yellen.
The former Fed Chair believes that cutting American tariffs on Chinese imports could reduce inflation, the administration’s biggest economic and political headache.
As of October, the US was importing Chinese goods at an annual rate of $600 billion, a 60% increase from the pre-Covid-19 level of October 2018. It is odd to speak of a Cold War between the US and China when the American industrial economy is massively dependent on Chinese imports.
Trade between the countries is so extensive that it has a major influence on the US price level.
Yellen told Reuters on October 31: “Our trade representative has said that we would consider additional tariffs reductions. We want to see China meet their commitments they made under Phase 1, but stabilizing and perhaps eventually lowering some tariffs in a reciprocal way could be a desirable outcome.”