US would use sanctions if China invaded Taiwan, Treasury Secretary Janet Yellen says, citing Ukraine war

• She said the measures against Russia showed the US can impose significant pain on aggressive countries and was prepared to do the same ‘in other situations’
• Yellen also said Biden wants Russia out of the G20, and the US will boycott some meetings in Indonesia if Moscow’s officials attend

US Treasury Secretary Janet Yellen said the Biden administration would be prepared to use all its sanctions tools against China if Beijing moved aggressively toward Taiwan.

“I believe we’ve shown we can” impose significant pain on aggressive countries, as evidenced by sanctions against Russia, Yellen told lawmakers on Wednesday as she testified before the House Financial Services Committee.

“I think you should not doubt our ability and resolve to do the same in other situations.”

Yellen was responding to questions from Republican congressman Patrick McHenry of North Carolina over whether the Treasury would be as willing to use sanctions against China as it has against Russia following Moscow’s invasion of Ukraine.

Russia’s attack on Ukraine has undermined confidence that world powers would be able to prevent a crisis from similarly erupting over Taiwan, a democratically governed island of more than 23 million people and key global source of semiconductors.

China has long claimed Taiwan as a renegade province and threatened to invade to prevent its independence. Beijing has declared that security disputes over Taiwan and Ukraine are “not comparable at all”.

Yellen also said at Wednesday’s hearing that President Joe Biden wants Russia expelled from the Group of 20 major economies forum, and the United States will boycott “a number of G20 meetings” in Indonesia if Russian officials show up.

Her comments raised questions over the future of the G20, which has been the premier global economic and policy forum since the 2008-2009 financial crisis.

Yellen said Russia’s invasion of Ukraine and the atrocities revealed after Russian troops retreated from Bucha “represent an unacceptable affront to the rules-based international order”.

She said it was unlikely that Russia could be expelled from the International Monetary Fund, but the Biden administration wants to push Russia out of active participation in such international institutions.

The G20 finance ministers and central bank governors are due to meet in person and virtually in Washington later in April on the sidelines of IMF and World Bank Spring meetings. Indonesia holds the G20 presidency this year and plans to host a finance meeting in July and a leaders summit in November.

“President Biden’s made it clear, and I certainly agree with him, that it cannot be business as usual for Russia in any of the financial institutions,” Yellen said.

“He’s asked that Russia be removed from the G20, and I’ve made clear to my colleagues in Indonesia that we will not be participating in a number of meetings if the Russians are there,” Yellen said.

The comments come as the Biden administration announced a new round of sanctions against Russian banks and elites, including banning Americans from investing in Russia and locking Sberbank, Russia’s largest lender and holder of a third of its bank deposits, out of the US financial system.

But transactions allowing European allies to purchase Russian oil and natural gas were exempted through special Treasury licences.

Yellen said that flexibility on Russian energy transactions was because many European countries “remain heavily dependent on Russian natural gas, as well as oil, and they are committed to making the transition away from that dependence as rapidly as possible”.

Author: Agencies, SCMP