FX.co ★ Yellen sees no 'significant Chinese response’ to US tariffs

American authorities have displayed remarkable naivety about China's potential response to their punitive measures. They seem to believe that the world's second-largest economy will react mildly to the latest restrictions slapped by the United States. However, China is not going to tolerate injustice. Undoubtedly, the Chinese government will at least level a forceful objection.

According to US Treasury Secretary Janet Yellen, the trade restrictions imposed by the US on China will not provoke a harsh reaction from Beijing. In fact, however, the response could be severe.

Her statement came after the media reported an impending increase in tariffs on a variety of Chinese imports. Tariffs on the import of electric vehicles could quadruple from 25% to 100%, the Wall Street Journal stated, citing reliable sources. Earlier, US President Joe Biden had announced plans to triple tariffs on Chinese steel and aluminum.

"President [Joe] Biden believes that anything we do should be targeted to our concerns and not broad-based, and hopefully we will not see a significant Chinese response. But that’s always a possibility," Yellen said. Earlier, China had hinted at imposing restrictions on products from Tesla and other American companies. Against this background, the head of the Treasury Department reiterated Joe Biden's thesis that the US would not allow China to dominate in strategic industries such as semiconductors and clean energy.

The White House considers complete dependence on Beijing in these areas unacceptable. Additionally, China is "not playing by the rules," Yellen stressed, raising concern about the country’s enormous subsidies in critical areas of advanced manufacturing.

Thus, tensions between Washington and Beijing continue to simmer. According to experts, elevated tariffs on EVs and other products will be among the toughest measures taken by Joe Biden in the economic race with China.