When Yellen gets to China, just sitting down and talking will indicate progress
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While many in Washington, D.C., are busy prepping for Fourth of July celebrations, folks at the Treasury Department are getting ready for a big international trip.
Treasury Secretary Janet Yellen will head to China later this week. She’ll meet with senior government officials in Beijing to discuss, according to Treasury, how the world’s two largest economies can “responsibly manage our relationship, communicate directly about areas of concern, and work together to address global challenges.”
There’s a giant list of economic issues Yellen could address during the trip: trade and tariffs, climate change, forced labor issues and more.
Abigail Hornstein, an economics professor at Wesleyan University, said there are two approaches the secretary could take.
“One would be to focus on the top short-term economic issues from the U.S. perspective, which are inflation and unemployment,” Hornstein said.
Based on that agenda, the talks could focus on supply chain issues and making sure goods and services flow easily between the two countries.
Or Yellen could bring a longer-term perspective, focusing more on the “structure of economic ties between the countries, looking at export and import patterns and foreign direct investment,” Hornstein said.
However, she expects a blend of these strategies with the emphasis on issues facing American companies that operate in China.
Roselyn Hsueh co-directs the political economy program at Temple University. She said, “Some of those important issues include market access for U.S. companies” — both in China and in countries where China has a lot of influence.
Plus there are trade issues.
“U.S. tariffs on Chinese imports, many of them from the different rounds of tariffs during the U.S.-China trade war, actually remain in effect,” Hsueh said.
But the larger goal of this trip, said Weifeng Zhong at George Mason University’s Mercatus Center, is to just ease tensions a bit.
“There are a lot of legitimate security concerns when it comes to our economic relationship with China. But maintaining the channels of communications and official engagement is important,” he said.
He said that just sitting down and talking would be a win. At the same time, “I don’t think the talks in itself could put the two countries back to the right track,” Zhong said.
But, he said, a first step is better than nothing.
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