SEOUL, July 18 (Reuters) – U.S. Treasury Secretary Janet Yellen will call on Tuesday for deepening trade ties between the allies to strengthen their supply chains, fight inflation and thwart “unfair trade practices” and efforts of China to dominate key raw material and technology markets.
Yellen will make the comments in a major policy speech in Seoul after touring the facilities of South Korean technology giant LG Corp ( 003550.KS ) during the final leg of her 11-day visit to the Indo-Pacific region.
“We cannot allow countries like China to use their market position in key raw materials, technologies or products to disrupt our economy and exert unwanted geopolitical influence,” Yellen will say, according to excerpts released by the Treasury Department.
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Instead, Yellen will say, the United States and allies like South Korea should focus on “keeping friends,” or diversifying their supply chains to rely more on trusted trading partners, strengthening economic resilience and reducing risks.
According to excerpts of her remarks, Yellen will say this will maintain the dynamism and productivity growth that comes with economic integration while helping to insulate citizens in the United States and South Korea from price increases caused by geopolitical risks.
Western powers have been racing to end their overdependence on China as a key supplier since the start of the COVID-19 pandemic, which exposed the fragility of global supply chains and revealed gaps in domestic capacity in key sectors.
Yellen will say the pandemic and Russia’s war in Ukraine — actions that Moscow calls a “special military operation” — have made clear the need to address supply chain vulnerabilities and work to reduce congestion and shortages that have pushed up prices around the world.
Keeping friends has offered the United States and its allies a way to preserve the best features of the rules-based global order while tackling unfair Chinese trade practices and securing access to vital raw materials and products, from medicines to semiconductors and batteries for electric vehicles. vehicles, she will say.
In her comments, Yellen was determined to highlight a series of investments LG has recently made to expand production of batteries for electric vehicles in the United States.
She will say that the key to a new approach to trade requires countries to properly account for and take into account the costs of overly concentrated supply chains, geopolitical concerns and value – instead of “over-focusing on costs”.
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Reporting by Andrea Shallal; Editing by Kenneth Maxwell
Our standards: The Thomson Reuters Trust Principles.
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