Summers Suggests U.S. Focus Global Agenda Elsewhere Than China

(Bloomberg) — Former U.S. Treasury Secretary Lawrence Summers said President Joe Biden’s administration should prioritize other international economic challenges before it decides to focus on China.

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Speaking a day after Treasury Secretary Janet Yellen laid down a stern challenge to President Xi Jinping over global economic leadership, Summers said the U.S. has other pressing problems to address on the world stage.

Among them: The lack of U.S. funding of international Covid-relief efforts and Washington’s lagging moves to tackle climate change. Summers also noted a failure of the U.S. to persuade European allies to ban imports of Russian oil, along with difficulty in winning congressional support for last year’s global corporate-tax deal.

“We need to start with those places before we go after China,” Summers told Bloomberg Television’s “Wall Street Week” with David Westin. “There’s plenty we need to work out with respect to China.”

Summers, a paid contributor to Bloomberg TV, said the U.S. must also decide whether to use institutions such as the International Monetary Fund to find ways to cooperate with China or to actively limit the Asian giant’s rise.

Inflation Peak?

Yellen on Wednesday called Beijing to account over its ever-closer relationship with Russia, and blasted China for practices that “unfairly damage” the national-security interests of others. She alluded to the use of market positions — China is a key provider of crucial rare-earth metals — for “geopolitical leverage.”

Meantime, speaking days after the U.S. government reported inflation is running at the fastest since 1981, Summers said that there were signs price pressures had peaked for the next several months — but that it was too soon to declare the all-clear.

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“We’re probably peaking for the next several months,” he said. “Whether we’re peaking indefinitely, I’m not certain that’s going to happen. It’ll depend on luck and decisions the Federal Reserve makes.”

Summers said, “We need to be very determined to come way down from where we are right now, adding that the “most likely” outlook was for a period of rising unemployment and still-high inflation.

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