WASHINGTON – The U.S. and South Korea should deepen their trade ties to avoid letting other countries use their market positions to unfair advantage, Treasury Secretary Janet Yellen said Tuesday during a visit where she also urged the U.S. ally to support a plan to seek a price cap on Russian oil.
Soaring energy prices figured heavily in the meetings in Seoul. During his talks with Yellen, South Korean President Yoon Suk Yeol called for international cooperation in stabilizing energy prices and easing supply chain disruptions that have contributed to decades-high inflation, Yoon's office said.
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In her remarks at a research and development facility run by LG, one of South Korea's biggest business groups, Yellen said Russia was threatening to spark a global food crisis by blocking ports in Ukraine after its invasion of the country caused energy prices to surge.
“All responsible countries must unite in opposition to this war and work together to end it swiftly,” Yellen said. “And that’s why the United States and other responsible allies and partners are seeking to reduce Russia’s revenue to wage its war without causing a necessary volatility in global energy markets.”
In response to Yellen's appeal to back the price-cap scheme, South Korean Deputy Prime Minister and Minister of Economy and Finance Choo kyung-ho said his country was willing to participate and the plan must be formulated in a way that would help stabilize global oil and consumer prices, the ministry said in a statement.
In April, LG announced plans to build a $1.4 billion battery plant in Queen Creek, Arizona. The U.S. has welcomed such investments as a way to reduce American reliance on supply chains that can be vulnerable to political antagonisms or disruptions like those that have arisen during the pandemic.
“We cannot allow countries like China to use their market position in key raw materials, technologies, or products to disrupt our economy or exercise unwanted geopolitical leverage,” Yellen told the gathering at the LG facility.
China “has directed significant resources to seek a dominant position in the manufacturing of certain advanced technologies, including semiconductors, while employing a range of unfair trade practices to achieve this position,” she said.
Yellen also has criticized China’s economic relationship with Moscow — urging the Asian superpower to use its “special relationship with Russia” to persuade it to end its invasion of Ukraine.
Yellen called on countries to engage in what she called “friend-shoring,” to lower economic risks for participating economies.
Friend-shoring, which Yellen has brought up in several speeches, refers to countries with shared values agreeing to trade practices that encourage manufacturing and reducing risks to supply chains.
“The purpose is to lower risks for our economy and theirs,” Yellen said. “In doing so, we can help to insulate both American and Korean households from the price increases in disruptions caused by geopolitical and economic risks and facilitate our businesses access to vital inputs and products from medicine to semiconductors to electric vehicle batteries.”
During her visit to Seoul, Yellen also met with Bank of Korea Governor Rhee Chang-yong. She stopped in South Korea en route back to Washington after attending a meeting of the Group of 20 financial leaders on Indonesia’s resort island of Bali over the weekend. She visited Tokyo on her way to Bali. It was her first trip to the region since she became treasury secretary.
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Hussein reported from Washington.