Europe and the US need to find a better way to “defend” themselves against the Chinese economic “machine”, a senior US trade official has said.
Ambassador Katherine Tai, US trade representative, said there had been “a lot of tension” between China and her country in recent years. “The growth of the Chinese economy over the course of the last 20 to 30 years has been incredible to see,” she said. Ms Tai, who is a member of US president Joe Biden’s cabinet, said that growth had put “pressure” on western economies.
The EU and US would have to work together on “defensive measures”, which could include tariffs, as well as proactive policies “to correct for a market dynamic that is not playing out in our favour,” the trade official said.
“We have been to this rodeo too many times before. Unless we figure out a different way to defend the way our economies work … it’s going to have significantly damaging economic and political outcomes for our systems,” she said.
It comes as US treasury secretary Janet Yellen is set to tell Chinese officials their country is producing too much of everything, especially clean energy goods.
In a series of meetings with top Chinese economic officials over the weekend, Ms Yellen will seek to convey her view that such excess production is unhealthy for China, amid growing concern about it in the US, Europe and other major economies.
Ms Tai was speaking at an event in Brussels in advance of a meeting of the EU-US Trade and Technology Council, a forum set up in recent years to improve co-operation.
The relationship between the EU and US was not a “whirlwind romance” in the “dating phase”, but one that was “pushing 80 years old,” she said.
“It’s okay if it doesn’t have oomph, but the relationship is very very strong. If we are looking at it through a transactional lens, really we’re setting ourselves up for another lifetime of disappointment, that is not what this relationship is about.”
Rosa Balfour, a director of think tank Carnegie Europe, told the event many in the EU had “nightmares” about the possible consequences of Donald Trump winning the coming US presidential election. Ms Tai said in the run up to the elections partners were looking for “reassurance” about what would happen.
“Democracies at this time in history, we have to figure out how to help reinforce each other,” she said. There was a need to put forward a “better version” of the current economic world order, she said.
The EU and US had been able to respond “extremely quickly and decisively” to place sanctions on Russia following its invasion of Ukraine, she said. There had been a “transatlantic, fast response, to something that none of us wanted to see happen, and yet happened anyway,” she said.
