Bloomberg — US Treasury Secretary Janet Yellen has cut short her trip to Japan, scheduled for the coming days, because of the impending showdown over the US debt limit.
Yellen’s travel plans have been pressurized to ensure she can continue to participate in the ongoing efforts in Washington to address the problem, said a senior Treasury official on a conference call with reporters Friday ahead of the Group of Seven meeting next week in Niigata, Japan.
President Joe Biden is scheduled to meet House Speaker Kevin McCarthy and other congressional leaders on Tuesday, the day of Yellen’s departure. A Treasury spokesman did not immediately respond when asked if Yellen would attend that hearing.
Biden and Republicans are at odds over the debt limit. Republicans want promises of more spending cuts before passing a higher cap, while Biden has insisted on a “clean” increase, keeping budget talks separate.
The federal government reached its legal borrowing limit in January, and since then the Treasury Department has been using special accounting procedures to get rid of the cash. AndYellen told Congress earlier this week that those measures could expire on June 1.
Agenda of the Group of Seven
The Treasury official said Yellen plans to stay in touch with administration colleagues in Washington about the debt limit during her trip to Japan.
During the G7 summit, Yellen will hold bilateral meetings with her various counterparts, including financial officials from Japan and the United Kingdom, the official said.
Among her priorities during her stay in Niigata, the official said, Yellen hopes to discuss with her allies ways to intensify efforts to suppress attempts to circumvent sanctions against Russia.
The European Union is already discussing its possible measures against third countries that it believes are not doing enough to prevent Russia from circumventing sanctions.
The US Treasury secretary will also continue to push her call for “friendly offshoring” (the idea that the US and its allies should reshape supply chains to reduce dependence on China for essential goods and materials), according to the official.
Yellen will likely spend some time during the trip explaining the Biden administration’s stance on China. He recently gave a speech in Washington saying that the United States does not intend to disrupt most US-China trade or slow China’s economic growth, even if it does a friendly overseas transfer and restricts access to the vanguard for reasons of national security.
This rhetoric has been interpreted as directed not only at Beijing, but also at allies who were concerned that rising tensions between the United States and China might end up dividing the world into competing trading blocs.
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