U.S. Treasury Secretary Janet Yellen is set to argue on Thursday that isolating the U.S. economy, as proposed by Republican presidential candidate Donald Trump, would be “deeply misguided.”
Yellen is expected to warn that such measures, including sweeping tariff hikes, would raise costs for American consumers and hurt U.S. business competitiveness.
Her remarks, to be delivered at the Council on Foreign Relations in New York, caution against a return to unilateral economic policies that she says are no longer viable in today’s interconnected world.
Though Yellen does not mention Trump by name, her comments reference his recent calls for imposing tariffs ranging from 10% to 20% on nearly all U.S. imports, and up to 60% on imports from China.
Trump has defended tariffs as a means to bolster U.S. manufacturing. On Wednesday, he called tariffs “the most beautiful word in the world,” suggesting they would spur domestic growth. However, Yellen argues that such protectionist measures would backfire. “Sweeping, untargeted tariffs would raise prices for American families and make our businesses less competitive,” Yellen said in the excerpts released by the Treasury Department.
Yellen also addressed the need for balanced economic relations with China, opposing the idea of cutting ties with Beijing entirely. “Trade and investment with China can bring significant gains to American firms and workers and must be maintained,” Yellen said, while also emphasizing the importance of addressing unfair trade practices and barriers to market access in China.
She pointed out that these issues contribute to excess industrial capacity in critical sectors, threatening the competitiveness of U.S. businesses. In contrast to Trump’s approach, Yellen endorsed President Joe Biden’s more targeted tariffs on Chinese imports, noting that similar measures are being considered by U.S. allies.
Yellen’s speech underscores her broader concern that a “go it alone” strategy could undermine U.S. efforts to manage global challenges, including security threats, supply chain disruptions, and China’s industrial policies.
