Treasury Secretary Janet Yellen said the U.S. and South Korea should deepen their trade ties to avoid working with countries that use their market positions to unfair advantage — calling out China by name.
"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 remarks prepared for delivery Monday, according to excerpts provided by the Treasury Department. She is set to make the speech at an LG Corp. factory in South Korea. LG in April announced plans to build a $1.4 billion battery plant in Queen Creek, Arizona. Yellen represented the U.S. at the Group of 20 finance minister meetings on Indonesia's resort island of Bali and made stops in Tokyo, Japan and Seoul, South Korea. She avoided visiting China but held a call with China's vice premier at the start of the month.
Yellen has been a critic of China's economic relationship with Russia — urging the Asian superpower to use its "special relationship with Russia" to persuade Russia to end its invasion of Ukraine. China "has directed significant resources to seek a dominant position in the manufacturing of certain advanced technologies, including semiconductors, while employing a range of unfair trade practices to achieve this position," she said in her prepared speech.
Citing "the unfair Chinese practices that damage our national security interests," Yellen calls on countries to engage in "friend-shoring" as a means to lower economic risks for participating economies. Friend-shoring, which Yellen has brought up in several speeches, refers to countries with shared values agreeing to trade practices that encourage manufacturing and reducing risks to supply chains.
The global economy has been ravaged by the impacts of the war in Ukraine and shutdowns caused by COVID-19. Skyrocketing energy costs and high inflation have touched every part of the globe. The Indo-Pacific region is seeing this play out in Sri Lanka, which is struggling through the island nation's worst economic crisis. Yellen is set to make her statements ahead of a Tuesday meeting with South Korean President Yoon Suk Yeol to end her first trip as treasury secretary to the Indo-Pacific region.