Published: Wed, January 20, 2021
Economy | By

Yellen says Biden to use all tools against China trade abuses

Yellen says Biden to use all tools against China trade abuses

Sen. Ron Wyden, D-Oregon, who will become chairman when Democrats take over the Senate, said it was his hope that Yellen could be confirmed by the full Senate as soon as Thursday.

Ms. Yellen said she and Mr. Biden are concerned about the national debt in the long run, but that the current economic conditions necessitate an immediate infusion of taxpayer money into the economy.

Delayed or inadequate support, she warned, could lead to a more-protracted economic recovery and cause long-term economic damage in the form of permanent job losses and business closures that could weigh on growth for years to come.

Yellen, who chaired the Federal Reserve from 2014 to 2018, said targeting relief for those most in need during the pandemic could help the economy recover in the short term.

She pledged that the value of the USA dollar "should be determined by markets" and "if confirmed, I will work to implement the President-elect's promise to oppose any and all attempts by foreign countries to artificially manipulate currency values to gain an unfair advantage in trade".

Wall Street stocks rose on Tuesday in reaction to Yellen's call for a hefty stimulus package, as well as to positive bank earnings updates.

The incoming Biden administration last week proposed direct federal aid of $350 billion to state and local governments as part of a proposed $1.9 trillion coronavirus relief bill that would relieve the financial stress on local governments.

Asked what outlays would provide the biggest "bang for the buck", Yellen said spending on public health and widespread vaccinations was the first step. It will also include $1,400-per-person checks to working families, extended unemployment insurance and housing and nutrition aid.

"Without further action, we risk a longer, more painful recession now - and long-term scarring of the economy later", Yellen says in prepared testimony, obtained by POLITICO.

Yellen said that she and Biden were aware of the country's rising debt burden. Interest rates are at historic lows and expected to remain there for some time, making borrowing more affordable, she said.

Yellen said she anticipates low yields are here to stay, however.

She added investment in clean technologies and electric vehicles was needed to cut carbon emissions, keep the USA economy competitive and provide good jobs for American workers.

Like the other nominees, Ms. Yellen sounded a hawkish note on China, calling it "our most important strategic competitor" and promising to address its "abusive, unfair and illegal practices", including undercutting American companies by dumping products, erecting trade barriers and stealing intellectual property.

Biden has said he will not move quickly to remove Trump's tariffs on China before a comprehensive review and consulting with allies. Republican Senator Mike Crapo said he would work towards an "expeditious" confirmation for Yellen.

Also Tuesday, Yellen earned bipartisan endorsements from every living former treasury secretary, all of whom signed a letter urging her "swift confirmation".

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