Yellen says nothing off table in response to China overcapacity

Treasury Secretary Janet Yellen said the US wouldn’t take “anything off the table” in response to China’s manufacturing capacity, including the possibility of additional tariffs to stem what she has described as a flood of cheap goods into the US market. “We’re concerned about the possibility of surges in Chinese exports to our markets in areas where they have a great deal of overcapacity,” Yellen said on CNN’s Fareed Zakaria GPS. “I’ve been very clear in my discussions with them that this is a concern not only to us, but also to other countries, to Europe, to Japan, and even to emerging markets. India, Mexico, Brazil,” she said. Yellen visited China last week, where she rebuked the country for “unfair economic practices,” including alleged mistreatment of US and other foreign companies operating in China and distortion of global markets by subsidizing overproduction in certain sectors. Asked if additional US tariffs could be in the cards, Yellen told CNN, “I wouldn’t take anything off the table as a potential response. But we really want to responsibly manage this relationship.” Chinese leaders have been pouring money into manufacturing, focusing on new industries such as electric vehicles, batteries, and renewable energy as China looks for new sources of growth for its slowing economy. Yellen defended the administration’s efforts to boost domestic manufacturing to steer away from a reliance on cheap Chinese goods, saying the effort will have only “a very modest influence on inflation.”