Treasury Secretary Janet Yellen went to battle for U.S. businesses Friday while also walking a diplomatic tightrope as she began her visit to Beijing.
Yellen raised concerns about China’s “punitive actions” against U.S. companies and Beijing’s new export controls on minerals key to the production of semiconductors.
But she also emphasized the need for communication between the two countries and “healthy economic competition that is not winner-take-all” in separate written remarks prepared for her meeting with Chinese Premier Li Qiang.
U.S. chip makers, such as
Nvidia
(Ticker: NVDA) and
Advanced Micro Devices
(AMD), have been caught in the crosshairs of the deteriorating relations between the world’s two largest economies.
Micron Technology
(MU) also has been impacted, after the Chinese government told operators of key infrastructure to stop buying products from the company.
Yellen said she would be taking the concerns of the U.S. business community directly to her Chinese counterparts, on a trip designed to “deepen our communications with China.”
“I’ve been particularly troubled by punitive actions that have been taken against U.S. firms in recent months,” she said at a roundtable discussion with American business leaders operating in China.
The tit-for-tat dispute between the world’s two largest economies has escalated this week in the buildup to Yellen’s visit. China announced Monday new export controls on metals targeting gallium and germanium, minerals that are key to the production of semiconductors.
Yellen said she was “concerned” by metals export controls. “We are still evaluating the impact of these actions, but they remind us of the importance of building resilient and diversified supply chains,” according to prepared remarks.
President Xi Jinping made comments earlier this week, shortly after China’s export controls were announced, calling on countries to avoid decoupling and the closing off of supply chains.
Yellen has a difficult job in the coming days, balancing the desire to stand up for U.S. business interests with the need to improve relations with China, rather than damaging them further. Both sides are saying the right things, but their actions are only intensifying the tech cold war.
Write to Callum Keown at [email protected]
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