Financial assistance

Treasury Secretary Janet Yellen sees no need for Chinese sanctions over war with Russia

Treasury Secretary Janet Yellen said Friday she doesn’t believe the United States should impose sanctions on China because of its ties to Russia.

“I don’t think it’s necessary or appropriate,” the Treasury Secretary told “Squawk Box” of potential sanctions against Beijing. “Senior administration officials are talking privately and quietly with China to make sure they understand our position.”

“We would be very concerned if they supplied weapons to Russia or tried to evade the sanctions that we have put in place against the Russian financial system and the central bank,” she said. “We don’t see that happening at this point.”

The Treasury Secretary’s remarks come as NATO leaders step up efforts to warn China not to allow Russia’s assault on Ukraine.

U.S. Treasury Secretary Janet Yellen speaks to employees after touring the Denver Mint, one of two coin manufacturing sites for the new American Women Quarters program, which includes the Maya Quarter Dollar Coin Angelou, in Denver, Colorado on March 11, 2022.

Jason Connolly | Swimming pool | Reuters

The United States and its allies have for weeks warned Beijing that it would face serious consequences if it aided Moscow by supplying weapons, offering alternative trade routes or creating disinformation campaigns.

China has not fully denounced Russia’s unprovoked attack on its neighbor and, like Russian President Vladimir Putin, has complained about NATO enlargement. US officials have also said Russia has asked China for military and economic assistance, a charge both countries deny.

President Joe Biden last week threatened Chinese leader Xi Jinping with unspecified consequences if Beijing supported Moscow as it sought to capture the Ukrainian capital of kyiv.

While it’s unclear how the White House would penalize Beijing, it would likely ask the Treasury Department to expand its economic sanctions.

In the interview, Yellen also discussed how the Russian invasion of Ukraine and the Covid-19 pandemic have underscored the importance of securing US supply chains.

“Perhaps American companies have focused on efficiency and organizing supply chains in a way that lowers costs but hurts resilience,” she said. “And supply chain resilience is a high administration priority.”

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War in Europe and global supply concerns have wreaked havoc on several key commodity markets, including crude oil and wheat. The price of West Texas crude oil futures jumped above $130 a barrel earlier in March after trading below $90 in January.

Soaring oil prices caused a corresponding rise in U.S. gasoline prices, which hit an all-time high earlier in the month at a national average of $4.33 a gallon.

Wheat remains above $10 a bushel, about 25% higher than two months ago.

But despite all the recent chaos, Yellen said she disagrees with claims that the globalization of trade is ending.

“I really have to push this off,” she said. “We are deeply involved in the global economy. I expect that to remain, it’s something that has brought benefits to the United States and many countries around the world.”

Asked about the role cryptocurrencies play in the Russian-Ukrainian war, Yellen said she views the asset class through its duty to protect American consumers and investors. She said she was focusing on those who would consider cryptocurrencies a wise investment decision.

“I have a bit of skepticism because I think there are valid concerns about it,” Yellen said. “Some have to do with financial stability, consumer and investor protection, use for illicit transactions and other things.”