U.S. Secretary of the Treasury Janet Yellen arrives alongside former U.S. President Bill Clinton to an event celebrating the Community Development Financial Institutions FUND (CDFI) at the U.S. Treasury Department on November 21, 2024 in Washington, D.C. The U.S. Treasury Department held the event to celebrate the 30th anniversary of CDFI. The CDFI was established during Clinton’s presidency to initiate assistance for financial institutions that supported underserved customers and communities. (Photo by Anna Moneymaker / GETTY IMAGES NORTH AMERICA / Getty Images via AFP)
Washington, United States — US President-elect Donald Trump’s proposals to impose sweeping tariffs on imports could counter earlier efforts to cool inflation, Treasury Secretary Janet Yellen said Tuesday, warning that consumer prices could rise.
Her comments at the Wall Street Journal’s CEO Council Summit come as Trump has vowed broad tariffs of at least 10 percent on all imports, and higher rates on goods from China, Canada and Mexico.
Article continues after this advertisementImposing broad-based tariffs could “raise prices significantly for American consumers and create cost pressures on firms” which rely on imported goods, Yellen said when asked about Trump’s plans.
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She cautioned that this could weigh on the competitiveness of certain sectors and increase costs to households.
Article continues after this advertisement“This is a strategy I worry could derail the progress that we’ve made on inflation, and have adverse consequences on growth,” she said.
Article continues after this advertisementBut she defended efforts by President Joe Biden’s administration to impose targeted tariffs on Chinese goods to counter unfair trade practices by Beijing.
Article continues after this advertisementShe has previously raised concern over China’s industrial overcapacity — which risks a flood of underpriced goods into global markets and could undermine the development of key US industries.
On Tuesday, Yellen also expressed regret that the United States has not made more progress on the country’s deficit, saying she believes it “needs to be brought down, especially now that we’re in an environment of higher interest rates.”
Article continues after this advertisementShe stressed the importance of an independent Federal Reserve too, saying that countries perform better economically when central banks are allowed to exercise their best judgment without political influence.
Trump has said that he would like “at least” a say over setting the Fed’s interest rate.
“I think it’s a mistake to become involved in commenting on the Fed and certainly taking steps to compromise its independence,” said Yellen.
“I believe it tends to undermine the confidence of financial markets and, ultimately, of Americans in an important institution,” she added.
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Yellen noted that she has spoken with Trump’s Treasury chief nomineeredgaming, billionaire hedge fund manager Scott Bessent, congratulating him on his nomination.
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