During an interview over the weekend, Janet Yellen, the Treasury Secretary under President Biden, emphasized the administration’s commitment to safeguarding national security, even if it means sacrificing narrow economic interests.
Yellen made these comments while in Beijing, speaking with Margaret Brennan on CBS News’s “Face The Nation.”
When asked about the potential retaliation from China in response to further restrictions on high-end technology sales, Yellen stated that national security was a non-negotiable priority.
She stressed that the administration would take action to protect it, even if these actions impacted the Chinese economy. However, Yellen assured such measures would be transparent, narrowly targeted, and thoroughly explained.
Yellen expressed concern regarding China’s decision to restrict exports of two minerals vital to the U.S. economy and military.
New export regulations will be implemented for minerals such as gallium, germanium, and numerous other related metals.
These regulations aim to penalize the West for restricting China’s access to advanced semiconductors.
China has established itself as the leading global producer of gallium and germanium, primarily by artificially suppressing their prices.
Christopher Ecclestone, principal at the natural resource research firm Hallgarten & Co., explains that when China ceases to suppress the price, extracting these metals in the West becomes economically feasible.
Consequently, China inadvertently undermines its market dominance.
“While they may enjoy temporarily higher prices, China eventually loses its stronghold, as we have witnessed with other minerals such as antimony, tungsten, and rare earths,” Ecclestone added.
She highlighted that the United States’ actions to address specific national security concerns were distinct from the broad scope of China’s measures, which appeared to lack similar precision.
One of the objectives of Yellen’s trip to China was to prevent unintended escalations that could harm the overall economic relationship between the two nations.
Due to limited contact in recent years, both due to COVID-19 and other factors, misunderstandings can arise.
Yellen underscored the importance of establishing person-to-person relationships and fostering ongoing communication channels to address concerns effectively.
She believed her trip had successfully built relationships and created opportunities for regular and substantive exchanges at various levels within their respective staffs.