WASHINGTON, April 10 (Xinhua) -- U.S. Treasury Secretary Janet Yellen is justifying a policy that restricts public access to affordable and clean technology while rejecting a fundamental economic principle, a protectionist move that would negatively impact both the United States and the global environment, Bloomberg reported on Tuesday.
In response to Yellen's comment that Chinese government support is currently leading to production capacity that significantly exceeds domestic demand and what the global market can bear, the report said that she is rejecting one of the most fundamental principles of economics for more than 200 years -- comparative advantage.
"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," said the report.
"In attacking China's clean-technology exports, however, the world is cracking down on one part of the economy where the private sector is dominant, and where the prospects for reducing global emissions are good," it said, adding that Chinese clean-technology firms are no more dependent on soft money than rivals elsewhere in the world.
It noted that the advantage of unilateral tariffs like those being considered by the United States and the European Union is that they don't need to hold up to the rigor of trade law. In the absence of a functioning World Trade Organization, it's a neat way of painting anti-climate protectionism as green industrial policy.
"If China's clean-tech investments have become a perceived problem for the United States and the European Union over the past year, it's as much to do with the way that the political establishment and major domestic companies in those markets have quietly soured on the energy transition over the same period," said Bloomberg. ■