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Friday, June 4, 2021

Why did US treasury secretary contact China Liu He?

https://www.cnbc.com/2021/06/02/us-treasury-secretary-yellen-chinas-vice-premier-liu-he-hold-call.html

Well, Yellen knew that US inflation was a clear and present danger.  If Yellen didn't do anything to contain it, the US rates including its treasury yields would spike and cause a financial meltdown.

Therefore, Yellen had no choice but to contact Liu He to talk about cooperation and also the partial or full removal of US-China tariffs.

Time is not on the US side because the existing US-China tariffs are hurting the US and not China.  The US-China trade deficits are still rising despite the additional tariffs.

By removing partial or full US-China tariffs, the US inflation pressure will be reduced immediately and the US will have more time to handle or prevent the impending financial crisis.

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