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Standard Chartered Bank is optimistic about US-China relations and expects relations 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.
Even though US President Joe Biden and his team are focused on improving domestic growth, they recognize that creating the conditions for global trade to flourish is essential, Robertsen said in an interview with “Squawk on Monday. Box Asia ”from CNBC.
“I don’t think that means they will abandon some of the tactics that were used by the Trump administration,” he said.
“Biden’s team has made it very clear that they believe the pricing strategy is flawed. That being said, I also don’t think they will reverse it tomorrow,” he noted, adding that ‘”They will use it as part of a larger negotiating strategy.”
US Treasury Secretary Janet Yellen said in an interview with CNBC last week: “For now, we have maintained the tariffs that were, you know, put in place by the Trump administration.” However, she added that the Biden administration will assess how to proceed in the future.
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 United States and China.
Trump signed the initial trade deal with Chinese President Xi Jinping in January 2020, ending a nearly 18-month trade war in which US and Chinese goods worth hundreds of billions of dollars were hit by retaliatory tariffs.
Areas of US-Chinese cooperation
Despite the current trade tensions between the world’s two largest economies, Robertsen is optimistic that relations between the two countries will improve.
“I see some areas for potential common ground between the United States and China, climate being one of them. This is an area where the two countries could make significant commitments for improvement. and that could lay the groundwork for more compromise in other areas, ”he said. “I am relatively optimistic that over the course of 12 to 24 months you will see a better account of the relationship between the United States and China.”
Additionally, Robertsen noted that the Biden administration is unlikely to use currency as a tool to influence its trade agenda.
“We believe the Trump administration has used this currency manipulator tag as one of many tools to try to help them achieve or pursue specific trade agendas,” he said. “I think Biden will be less aggressive with this particular tactic.”
Last year, the US Treasury Department under Trump labeled Switzerland and Vietnam as currency manipulators. He also added India, Thailand and Taiwan to a list of countries he says are deliberately devaluing their currencies against the US dollar. A weak currency makes a country’s exports cheaper internationally, which makes those exports more attractive.
The Biden administration wants currency markets “to operate freely and efficiently, with as little interference as possible,” according to Robertsen.
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