Raimondo Worries About Election-Year Protectionism

“Half the world is voting in an election this year, which always brings out people’s protectionist tendencies,” she said at a Semafor event. “Of course, I worry about that. We can’t close ourself off from the world. That would be a bad thing.”

In addition to the U.S. presidential race in November, dozens of countries, including India, Mexico and the U.K., are expected to hold national elections this year, and the EU plans to hold parliamentary elections in June.

Despite growing U.S. concerns about China's economic and military assertiveness and human rights violations, Raimondo said it would be a mistake for the U.S. to cut off trade with that country, even as the Biden administration proposed higher tariffs on Chinese steel and aluminum.

“We sell billions of dollars a year of semiconductor chips to China,” she said. “That’s fine. We don’t want to de-link ourselves economically. If stuff is readily available around the world, I don’t want to prevent U.S. companies from selling that to China.”

However, Raimondo will continue to oppose allowing U.S. companies to export “our crown jewels” to China, including the “most sophisticated” artificial intelligence, computing chips and chipmaking equipment. “That is national security and I don’t care how much revenue you have to give up, you’re not allowed to sell it to China,” she said.

Also during the event, Deputy Treasury Secretary Wally Adeyemo said the Biden administration continues to talk with other Group of Seven (G7) nations about the possibility of using about $300 billion in frozen Russian assets to help Ukraine. Treasury Secretary Janet Yellen in February called for exploring such an approach (see 2402270043).

"We're talking through a number of different options" for the assets, Adeyemo said. "One of them is seizure. But another is collateralizing or even using the windfall profits or the interest from these assets to fund a loan."

While Sen. J.D. Vance, R-Ohio, has asserted that seizing Russian assets could weaken the Western financial system and make it difficult for the U.S. to sell bonds to finance its national debt, Adeyemo said that working with other wealthy nations through the G7 should ease such concerns. "Those are the owners of the world's deepest, most liquid markets and the world's potential reserve currencies, and acting together demonstrates that we are going to act to defend our values," he said.