By David Lawder

FRANKFURT (Reuters) -U.S. Treasury Secretary Janet Yellen said on Tuesday that the United States and Europe needed to respond to China's industrial overcapacity in a "strategic and united way" to keep manufacturers viable on both sides of the Atlantic.

Yellen told reporters during a visit to Frankfurt that G7 finance ministers shared U.S. concerns about Chinese efforts to dominate clean energy industries, but did not need "detailed coordination" on trade actions following the imposition of steep U.S. tariffs on Chinese goods.

"But I do think that the concerns about China's strategy are shared and all I'm suggesting is that given that many countries share this concern, it's more forceful to communicate to China as a group," Yellen said.

In remarks on the U.S.-European alliance in Frankfurt, Yellen said China's excess industrial capacity threatened both American and European firms as well as the industrial development of emerging market countries.

"China's industrial policy may seem remote as we sit here in this room, but if we do not respond strategically and in a united way, the viability of businesses in both our countries and around the world could be at risk," she said.

Last week, the Biden administration announced steep new tariffs on Chinese electric vehicles (EVs), solar products, semiconductors, battery parts, steel and other strategic industries.

Yellen had warned Chinese officials on a trip to Guangzhou and Beijing in April that the U.S. would not accept their excess production of these goods that would flood global markets with cheap exports.

In remarks later at the TechQuartier technology and finance incubator in Frankfurt, Yellen said Chinese production in these sectors significantly exceeded global demand, threatening the development of clean energy industries around the world.

The Biden administration was taking action to protect U.S. workers and firms from being undercut by "unfair Chinese economic competition", she said.

She added that Chinese industrial capacity would be a focus of the Group of Seven finance meetings later this week in Stresa, Italy.

"We want to see healthy green technology sectors, from innovative start-ups to green manufacturing factories, in the United States, Europe, and around the world, not just in China," Yellen said.

FROZEN RUSSIAN ASSETS

Yellen, who received an honorary degree from the Frankfurt School of Finance and Management, said the European Union and other countries were taking similar actions to use their own authorities to investigate potential trade remedies for Chinese EVs and other products.

Yellen also said that it was important for the G7 countries to show that they had a plan to channel substantial aid to Ukraine from some $300 billion in frozen Russian assets.

She said that not every detail of the plan with a "completed term sheet" needed to be worked out by the time of the G7 leaders summit in Puglia, Italy, on June 13-15. But the plan needed enough agreement that leaders could seriously consider it.

Earlier, Yellen said the U.S. and European Union should stand together against Russian aggression and Iranian "support for terrorism," including agreeing on a way to unlock the value of some $300 billion worth of frozen Russian sovereign assets to aid Ukraine.

"That's why I believe it's vital and urgent that we collectively find a way forward to unlock the value of Russian sovereign assets immobilized in our jurisdictions for the benefit of Ukraine," Yellen said. "This will be a key topic of conversation during G7 meetings this week."

Yellen also is pushing for the G7 finance leaders to agree at their meetings this week on a plan to use the income stream from the frozen Russian sovereign assets to back a larger loan to Ukraine.