Treasury Secretary Janet Yellen called yesterday for deeper trade ties with allies as a means of strengthening supply chains, combating inflation and ending unfair trade practices by China, according to Reuters and Axios.
What happened: “‘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,” Axios reported.
A path forward: Yellen said that the U.S. and its allies “should focus on ‘friend-shoring,’ or diversifying their supply chains to rely more on trusted trading partners, strengthening economic resilience and lowering risks,” according to Reuters’s summary of her pre-released remarks.
- She noted that “friend-shoring offered the United States and its allies a way to preserve the best features of the rules-based global order, while addressing unfair Chinese trade practices and ensuring access to vital inputs and products—from medicine to semiconductors and electric vehicle batteries,” according to Reuters.
Our take: The NAM has long emphasized the need to “negotiate cutting-edge trade agreements, including those with major U.S. trading partners, to provide certainty in the global marketplace, open markets for U.S.-manufactured goods, eliminate unfair barriers and set fairer and stronger standards.”
What’s required: “Manufacturers urge the Biden administration to advance an ambitious, proactive trade agenda,” said NAM Vice President of International Economic Affairs Ken Monahan.
- Monahan added that this agenda should include “the launch of U.S. discussions to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, the negotiation of robust regional accords, such as the Indo-Pacific Economic Framework and the Americas Partnership for Economic Prosperity, reengagement in ambitious trade agreement talks with the United Kingdom and Kenya and the exploration of new trade agreements with additional markets in Latin America, Africa and beyond.”