**Yellen Heads to Beijing Amidst Growing Trade Tensions**
Janet Yellen, the Treasury Secretary, is embarking on her first trip to Beijing since assuming office in 2021. This visit comes at a critical time as the relationship between the world’s two largest economies becomes increasingly tense. Yellen will be working to address issues related to trade, national security, and human rights. The goal is to maintain an economic relationship that fosters growth and innovation while avoiding a complete severing of ties. Yellen’s visit follows a meeting with China’s ambassador to the United States, Xie Feng, which aimed to maintain open lines of communication.
**Europe and the US Discuss Steel and Minerals Trade**
The European Commission’s trade chief, Valdis Dombrovskis, is in the United States to discuss trade in steel and critical minerals. These talks involve U.S. Trade Representative Katherine Tai and other officials from the Biden administration. Both sides are working towards a deal that encourages trade in steel and aluminum products made with lower carbon emissions. Additionally, discussions on a proposed critical minerals agreement are ongoing. This agreement would allow EU battery companies to qualify for consumer tax credits under the Inflation Reduction Act. Dombrovskis will also focus on the agenda for the upcoming fifth meeting of the Trade and Technology Council.
**China Imposes Export Controls on Critical Metals**
In a move that further complicates the trade relationship between the U.S. and China, China has announced export controls on gallium and germanium, two metals crucial for digital and green technologies. These include semiconductors, 5G base stations, and solar panels. This decision comes after the Netherlands imposed restrictions on the sale of chips-printing equipment, and the EU agreed on a de-risking strategy towards China.
**Trade Data and Tariff Tally**
As Yellen arrives in Beijing, the Commerce Department is set to release trade data for May. This data is expected to show a continuing slowdown in trade with China due to increased trade friction. While U.S. exports to China have seen a slight increase, imports from China have significantly declined. The tariffs imposed on Chinese goods under Section 301 of the 1974 Trade Act have resulted in the collection of $182.91 billion by Customs and Border Patrol.
**USMCA Free Trade Commission Meeting**
The meeting of the USMCA Free Trade Commission is taking place this week between U.S. Trade Representative Katherine Tai, Canadian Trade Minister Mary Ng, and Mexican Economy Minister Raquel Buenrostro. This meeting serves as an opportunity to address various disputes and concerns within the USMCA agreement. These include energy and biotech policies in Mexico, dairy barriers in Canada, and softwood lumber duties in the U.S. One significant issue is the implementation of the agreement’s new auto rules of origin regulations, which Canada and Mexico have challenged due to the U.S. interpretation being more burdensome. Despite winning the case, the methodology has not yet been changed by the Biden administration.
Overall, the U.S. is navigating significant trade relationships with China, Europe, and North America. The visits and discussions during this week aim to address trade tensions, strengthen cooperation, and find common ground on various issues.