Standard Chartered Bank is positive about US-China relations and expects ties between the two countries to improve in the next 12 to 24 months, according to Eric Robertsen, chief strategist and global head of research at the bank.
Although US President Joe Biden and his team are committed to improving domestic growth, they realize that it is critical to create conditions for global trade to flourish, Robertsen said in an interview with Squawk Box Asia on Monday. CNBC said.
“I do not think that means they will abandon some of the tactics used by the Trump administration,” he said.
“The Biden team has made it very clear that they think the tariff strategy was flawed. That said, I also do not think they are going to reverse it tomorrow,” he notes, adding that “they will use it as part of a broader negotiation strategy. “
US Treasury Secretary Janet Yellen said in an interview with CNBC last week: “We are currently keeping the tariffs set by the Trump administration in place.” However, she added that the Biden administration will evaluate how to proceed.
The White House also said last month that it would review all national security measures put in place by the Trump administration, including the Phase 1 trade deal between the US and China.
Trump signed the initial trade agreement with Chinese President Xi Jinping in January 2020 and interrupted a nearly 18-month trade war in which US and Chinese goods worth hundreds of billions of dollars were hit by retaliatory tariffs.
Areas for US-China cooperation
Despite the current trade tensions between the two largest economies in the world, Robertsen is optimistic about improving relations between the two countries.
“I do see some areas where the US and China could potentially have a common ground. Climate is one of them. It is one area where both countries can make significant commitments to improve and that could lay the groundwork for more compromises in other areas,” he said. said. “I am relatively optimistic that you will see a better account of US-China relations over the course of 12 to 24 months.”
In addition, Robertsen noted that it is unlikely that the Biden government will use currency as a tool to influence its trading agenda.
“We believe the Trump administration has used this currency manipulator label as one of the many tools to help them achieve or pursue specific trade agendas,” he said. “I think Biden will be less aggressive with that particular tactic.”
Last year, the U.S. Treasury Department under Trump branded Switzerland and Vietnam as currency manipulators. It has also added India, Thailand and Taiwan to a list of countries that they say could deliberately devalue their currencies against the US dollar. A weak currency makes a country’s exports cheaper internationally, which in turn makes exports more attractive.
According to Robertsen, the Biden administration wants foreign exchange markets to function freely and effectively, with as little intervention as possible.