Yellen: logistics crisis would need protectionist measures

US Treasury Secretary Janet Yellen said the country’s reliance on foreign supply chains has proven to be a vulnerability and that the United States would need to manufacture the most critical products domestically to protect its economic and national security.

“Policies that people describe as protectionist may be necessary to create the right incentives to produce things at homeYellen said in an interview recorded Monday for an online conference hosted by the Financial Times. He did not offer any further details on the possible measures he envisioned.

The Treasury leader also said, “we certainly want to work with other countries, with our allies and partners, to collectively address supply chain resilience”, In statements broadcast on Tuesday. “So I don’t think this is just about America producing everything at home, but in some cases that may be part of the answer.”.

Last week, Yellen also cited trade measures in the context of the inflation discussion, saying that “tariffs contribute to higher prices in the United States”. He noted that on the tariff increases imposed during the Donald Trump Administration, “some of them create problems without having any real strategic justification”.

Yellen had pointed out at a conference on Thursday organized by Reuters that the office of the United States trade representative has “open a process in which companies can request”Reducing tariffs, in cases where the cost to Americans outweighs any benefits.

Disruptions caused by the COVID-19 pandemic have limited the supply of many goods, including semiconductors found in a range of products, from electronics to automobiles, leading to frustration for manufacturers and higher prices for consumers. . Yellen said it could take “a couple of years”Solve the bottlenecks of many products.

Earlier this year, President Joe Biden ordered a review of such vulnerabilities that focuses on semiconductors, batteries, critical minerals and pharmaceuticals. Yellen said the review will move into a second phase that will examine supplies needed for defense, food, public health and communications technologies.

Yellen also repeated his view that the high inflation was primarily caused by supply problems related to the pandemic, and that it would fade as the virus was brought under control. He said he saw no evidence of a wage and price spiral that could sustain the pace of price increases for an extended period.

While the economy and labor market remained strong, he acknowledged that the continued low supply of labor was “a mystery”Amid the high demand for workers.

“I’m not sure I know the answer“Yellen said, adding that over time a tight labor market and improving health conditions will likely bring some workers back.