Yellen says Harris would maintain US leadership on global issues

By David Lawder

RIO DE JANEIRO (Reuters) -U.S. Treasury Secretary Janet Yellen said on Thursday that Vice President Kamala Harris shares President Joe Biden's core values on global and economic issues and would maintain U.S. international leadership if she were elected to succeed him.

In her first public remarks on the issue since Biden ended his reelection campaign and endorsed Harris for president, Yellen said Harris "deeply understands" economic issues, from helping families thrive to creating good jobs and bringing down inflation.

"On issues confronting America in the world, she deeply understands what's necessary and why it is important to restore U.S. leadership on the global stage and she's been a critical part of that effort," Yellen said in a press conference at a Group of 20 finance leaders meeting in Brazil.

"I feel the core values that have been reflected in the policies of this administration are ones Vice President Harris deeply embraces," Yellen added.

Harris earlier this week secured support from a majority of delegates to win the Democratic nomination for president and challenge former President Donald Trump for the White House in the Nov. 5 election. Known mostly for her U.S. domestic work on reducing economic inequality, Harris' views on international economic issues are less clear.

Yellen sad she was "deeply proud" to work for both Biden and Harris and added that their administration would continue to demonstrate a "commitment to multilateralism," including through joint work on climate, hunger, pandemics, debt relief and halting Russian aggression against Ukraine.

POLICY ROLLBACK RISKS

Yellen also told reporters that a reversal of the Biden administration's global initiatives - from climate policy to international tax cooperation - would be detrimental to the success of the global economy and America's place in it.

Without mentioning Trump's desire to roll back deals such as the two-pillar global minimum tax and a reallocation of taxing rights on large multinationals, Yellen said such global cooperation was "deeply in the interests of Americans" and had bipartisan support in Congress.

"I believe there's every reason for them, regardless of who occupies the White House, to ratify that agreement," Yellen said of the global corporate tax agreement, adding that this would avoid proliferation of discriminatory digital services taxes.

She also said that any roll-back of financial support for Ukraine would threaten the security of Ukraine, Europe and the U.S. and it was in the global interest to stop Russia's aggression.

Yellen lauded Biden for overseeing strong U.S. economic growth in recent years, saying the Biden-Harris economic plan had created 15.7 million jobs during their term and was helping to keep the global economy resilient.

She said stronger-than-expected second-quarter GDP growth and lower inflation data showed that the U.S. economy is on a path "to steady growth and declining inflation."

TAXING THE ULTRA-RICH

Regarding Brazil's proposal for a global tax on billionaires, Yellen said the U.S. was "strongly supportive of progressive taxation" and making the ultra-wealthy pay their fair share of taxes.

She said the U.S. was happy to work with Brazil in propagating ideas for progressive taxation, but declined to endorse a global agreement on taxing the super-wealthy.

"Tax policy is very difficult to coordinate globally and we don't see a need or really think it is desirable to try to negotiate a global agreement on that," Yellen said. "We think that all countries should make sure that their taxation systems are fair and progressive."

Yellen also said she would keep pressing China, a G20 member, to address its state-led macroeconomic model, which channels too large an amount of savings and subsidies into manufacturing, helping to create excess industrial capacity.

"This poses a threat to the viability of firms and workers around the world, and I know my concerns are shared by many at these meetings," she said in prepared remarks.