Janet Yellen: Trump’s Tariffs Are Going to Produce Decoupling from China; ‘I Regard That as Very Undesirable’

LEINZ: “Well, and you, Madam Secretary, together with the Biden Administration, were largely, were very deliberate in saying that the goal was not decoupling from China. Is that actually, though, what is going to be —“

Yellen: “Yes.”

LEINZ: “— the effect of these policies, a decoupling?”

Yellen: “Well, if tariffs at this level remain in place, it seems to me it must produce decoupling. And I regard that as very undesirable. I think the tariffs that we’ve placed on China are going to impose very significant burdens on American households. Now, of course, things are changing by the day. There’s at least a temporary reprieve on auto parts that we learned about today. But reasonable, you know, estimates of the impact on the average American household of these tariffs, the whole program, but especially China, is around $4,000 per household. This isn’t good. And most of these goods we can’t produce in the United States, or if we were able to do so, it would take years to shift production. And, you know, unfortunately, with the uncertainty that surrounds these policies, you know, I think most businesses are in a situation where they must feel paralyzed. You don’t know if it makes any sense to cease production in China and to move it to the United States. And unfortunately, some of our closest allies no longer believe commitments that we make are good and will remain in force. So, if I were a business thinking about coming to the United States to get behind the tariff walls, I wouldn’t feel confident that when my factory came online several years down the road, that the tariffs would still be there.”