Yellen vows tough U.S. measures against countries abusing economic order (updated)

Defense Metals

19/07/2022 07:51

(Recasts, adds quotes, details, rare earths firm quote)
    By Andrea Shalal
    SEOUL, July 19 (Reuters) - U.S. Treasury Secretary Janet
Yellen on Tuesday said deeper trade ties among allies could help
fight inflation and thwart China's "unfair trade practices,"
vowing to impose harsh consequences on those who abuse the
global economic order.
    Yellen made the comments in a policy speech in Seoul after
touring the facilities of South Korean tech heavyweight LG Corp
 003550.KS  during the final leg of her 11-day visit to the
Indo-Pacific region.  urn:newsml:reuters.com:*:nL1N2YZ0GI
    "We cannot allow countries like China to use their market
position in key raw materials, technologies or products to
disrupt our economy and exercise unwanted geopolitical
leverage," Yellen said.
    Instead, the United States and allies like South Korea
should focus on "friend-shoring", or diversifying their supply
chains to rely more on trusted trading partners, strengthening
economic resilience and lowering risks, she said.
    The United States is pushing for closer trade ties with
South Korea and other trusted allies to improve the resilience
of supply chains, and avert possible manipulation by
geopolitical rivals, Yellen told Reuters on Monday.  urn:newsml:reuters.com:*:nL1N2YZ0GI
    Western powers have raced to end their dependence on China
as a key supplier since the start of the COVID-19 pandemic,
which exposed the fragility of global supply chains and laid
bare gaps in domestic capacities in key sectors.
    Yellen also took aim at Russia over its war in Ukraine,
which Moscow describes as a "special military operation", and
continued to press for adoption of a price cap on Russian oil.
    "Economic integration has been weaponised by Russia," she
said, decrying the impact of the war on supply chain
vulnerabilities, as well as logjams and shortages that have
driven prices higher around the world.
    "We will impose harsh consequences on those countries that
abuse or break that order, as we have demonstrated with our
unprecedented response to Russia’s aggression." 
    Yellen has said she will discuss the oil price cap proposal
with top officials in Seoul.  
    Friend-shoring offered the United States and its allies a
way to preserve the best features of the rules-based global
order, while addressing unfair Chinese trade practices and
ensuring access to vital inputs and products - from medicine to
semiconductors and electric vehicle batteries, she said.
    Yellen highlighted a series of investments that LG and other
South Korean conglomerates such as Samsung recently made to
expand the manufacturing of semiconductors and electric vehicle
batteries in the United States.
    She said the key to the new approach on trade required
countries to properly account for and factor in the costs of
overly concentrated supply chains, geopolitical concerns and
value - rather than "overly focusing on costs". 
    Yellen was hosted by LG Chem  051910.KS  CEO Hak Cheol Shin
in a tour of LG facilities in Seoul on Tuesday morning.
    An avid collector of rocks, Yellen listened attentively as
Shin explained the process of building electric vehicle
batteries, including the need for lithium. 
    "The United States and the West in general are highly
dependent on China not just for rare earths, but also a number
of other strategic minerals like lithium and cobalt because
China controls the supply chain," said Luisa Moreno, president
of rare earths firm Defense Metals  DEFN.V . 
    "It is imperative for the U.S. and other industrial nations
to develop critical materials supplies chains outside China,”
Moreno said, adding the any effort to go it alone would be
"expensive and increase the risk of failure."
    LG Chem, besides being the parent company of electric
vehicle battery maker LG Energy Solution  373220.KS , also has
battery materials and petrochemical businesses. 
    Yellen also spoke to a group of women entrepreneurs, telling
them boosting women's participation in the workforce and giving
them more leadership opportunities would increase the economic
potential of South Korea and the United States.  urn:newsml:reuters.com:*:nL1N2Z009M


    

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Yellen says more opportunities for women will boost economic
potential of U.S., S.Korea     urn:newsml:reuters.com:*:nL1N2Z009M
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 (Reporting by Andrea Shalal; Writing by Joyce Lee; Editing by
Himani Sarkar and Stephen Coates)
 ((joyce.lee@tr.com;))