Commentary: US is rejecting 200 years of economics to block China clean tech

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Commentary: US is rejecting 200 years of economics to block China clean tech
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US Treasury Secretary Janet Yellen’s plan is a protectionist disaster that will impede the path to net zero, says David Fickling for Bloomberg Opinion.

US Treasury Secretary Janet Yellen and People's Bank of China Governor Pan Gongsheng shake hands before a meeting in Beijing, China , on Apr 8, 2024. SYDNEY: Imagine if a Chinese company announced plans to build the biggest electric vehicle battery factory the world had ever seen.

If a country can manufacture goods at lower costs than you can, you shouldn’t raise tariff barriers. Instead, you should import the goods, and send back something in return where your industry is more efficient. Another notable factor is that imbalances in the US-China economic relationship now are as minimal as they have been in a generation. The bilateral trade deficit in 2023 came to US$279 billion, the lowest since 2010. Relative to the size of the US economy, the figure is the lowest it’s been since 2002, just months after China joined the World Trade Organization .

In lithium-ion batteries, we are still below target. In wind power - the clean-technology segment where exports are most difficult because of the huge size of turbines, and as a result a decent proxy for where the world might be if it weren’t for the investment plans of ambitious Chinese companies - we are drastically deficient.

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