In a speech at the Council on Foreign Relations, U.S. Treasury Secretary Janet L. Yellen discussed the Biden-Harris Administration’s international economic policy, particularly its alignment with domestic economic objectives.
According to a press release, Yellen began by underscoring the administration's achievements in driving a “historic economic recovery,” citing strong U.S. GDP growth, low unemployment rates, and a significant decline in inflation.
“We’re now doing everything we can to lower costs for American families and pursuing a strategy I’ve called modern supply-side economics, which aims to expand our economy’s capacity to produce while reducing inequality,” Yellen said.
Yellen noted that this approach aims to increase the economy’s capacity while simultaneously addressing inequality, with a focus on enhancing job opportunities for Americans without college degrees.
As the upcoming IMF and World Bank Annual Meetings approach, Yellen reiterated the importance of the global economy for U.S. prosperity. She criticized proposals for high tariffs and isolationist policies, labeling such strategies as “deeply misguided,” and warned that they would ultimately raise prices for American families and undermine competitiveness.
“American businesses and families have a tremendous amount to gain from our connections to the global economy and from U.S. global economic leadership,” she said.
Yellen highlighted the administration's efforts to strengthen supply chains through initiatives such as the CHIPS and Science Act and “friendshoring.” Additionally, she mentioned the establishment of the Minerals Security Partnership, aimed at developing critical mineral supply chains.
“We’re strengthening our supply chains through an approach I’ve called friendshoring, which aims to bolster ties with a wide range of trusted allies and partners,” Yellen said.
Addressing global challenges, Yellen pointed out the importance of tackling pandemics and climate change. She emphasized that "without addressing critical gaps in the global health infrastructure... a future pandemic could negatively impact many economies, with significant spillovers to ours." To this end, she referenced the launch of the Pandemic Fund and initiatives to combat climate change, which include the Inflation Reduction Act and partnerships aimed at facilitating transitions to clean energy.
Yellen also discussed the need to counter threats to U.S. competitiveness and national security, particularly regarding China. She acknowledged the potential benefits of trade with China but insisted that “we must also have a healthy economic relationship based on a level playing field.” She highlighted the administration's strategic actions in response to unfair trade practices and the industrial overcapacity that poses risks to American firms.
“China’s barriers to market access and unfair trade practices currently cause challenges for American firms and workers and for other foreign businesses looking to operate in China,” Yellen said.
Yellen went on to express the necessity of strategic international engagement in an interconnected world. "America’s economic well-being depends on the world’s," she affirmed, stating that isolationism would ultimately harm both the U.S. and global economies.
“I am convinced that there is simply no other path forward... strategic international economic policy that delivers for American families and businesses,” Yellen said.