Treasury Secretary Janet Yellen shortened her upcoming trip to Japan to attend a gathering of finance ministers and central bank governors thanks to the looming showdown over the US debt limit.
(Bloomberg) — Treasury Secretary Janet Yellen shortened her upcoming trip to Japan to attend a gathering of finance ministers and central bank governors thanks to the looming showdown over the US debt limit.
Yellen’s travel plans were compressed to ensure that she can continue to participate in ongoing efforts in Washington to address the issue, a senior Treasury official said Friday in a conference call with reporters ahead of next week’s Group of Seven gathering in Niigata, Japan.
President Joe Biden is scheduled to meet House Speaker Kevin McCarthy and other congressional leaders Tuesday, the day Yellen departs. A Treasury spokesperson didn’t immediately respond when asked if Yellen would attend that session.
Biden and Republicans are locked in a stare-down over the debt limit. Republicans want promises of future spending cuts before they approve a higher ceiling, while Biden has insisted on a “clean” increase, with budget talks kept separate.
The federal government reached the statutory cap on borrowing in January and the Treasury has since been using special accounting measures to make cash available. Those measures could run out as soon as June 1, Yellen told Congress earlier this week.
G-7 Agenda
The Treasury official said that Yellen plans to remain in touch with administration colleagues in Washington over the debt limit during her travel to Japan.
At the G-7, Yellen will hold bilateral meetings with a number of counterparts, including finance chiefs from Japan and the UK, the official said.
Among her priorities while in Niigata, Yellen hopes to discuss with allies ways to intensify efforts to crack down on efforts to evade sanctions against Russia, the official said.
The European Union is already discussing its own potential measures to target third countries it believes aren’t doing enough to prevent Russia from evading sanctions.
The US Treasury chief will also continue pushing her advocacy for “friend-shoring” — the idea that the US and its allies should reshape supply chains to reduce dependency on China for critical goods and materials — the official said.
Yellen is likely to spend time during the trip explaining the Biden administration’s posture toward China. She recently delivered a speech in Washington saying the US wasn’t seeking to disrupt the majority of US-China trade, or to hold back China’s economic growth, even as it proceeded with friend-shoring and restricting access to cutting-edge technologies for national security reasons.
That speech has been interpreted as aimed not only at Beijing, but also at allies that had become concerned rising tensions between the US and China might eventually divide the world into competing trade blocs.
(Updates with context and further plans for trip, starting in third paragraph.)
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