Standard Chartered Bank is optimistic about US-China relations and expects ties between the two countries to improve in the next “12 to 24 months,” according to Eric Robertsen, the bank’s chief strategist and global head of research.
Even with US President Joe Biden and his team focused on improving domestic growth, they recognize that it is critical to create conditions for global trade to thrive, Robertsen said in an interview with CNBC’s “Squawk Box Asia” on Monday.
“I don’t think it means that they are going to abandon some of the tactics that were used by the Trump administration,” he said.
“Biden’s team made it very clear that they think the tariff strategy was flawed. That said, I don’t think they will reverse that tomorrow,” he noted, adding that “they are going to use it as part of a more negotiating strategy. broad. “
U.S. Treasury Secretary Janet Yellen said in an interview with CNBC last week: “At the moment, we have maintained the tariffs that were, you know, set by the Trump administration.” She added, however, that the Biden government 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 agreement between the U.S. and China.
Trump signed the initial trade agreement with Chinese President Xi Jinping in January 2020, ending an almost 18-month trade war in which American and Chinese goods worth hundreds of billions of dollars were hit by retaliatory tariffs.
Areas for US-China cooperation
Despite current trade tensions between the world’s two largest economies, Robertsen is optimistic about how to improve relations between the two countries.
“I see some areas of common potential between the US and China, the climate being one of them. This is an area where the two countries could make significant commitments to improvement and that could lay the groundwork for more commitments in other areas,” he said. “I am relatively optimistic that, over the course of 12 to 24 months, you will see a better narrative of US-China relations.”
In addition, Robertsen noted that the Biden government is unlikely to use currency as a tool to influence its trade agenda.
“We believe that the Trump administration used this currency manipulator label as one of many tools to try to help them reach or pursue specific trade agendas,” he said. “I think Biden will be less aggressive with that specific tactic.”
Last year, the U.S. Treasury Department, under Trump’s command, labeled Switzerland and Vietnam as currency manipulators. He also added India, Thailand and Taiwan to a list of countries that may be deliberately devaluing their currencies against the US dollar. A weak currency makes a country’s exports cheaper internationally, which in turn makes those exports more attractive.
The Biden government wants foreign exchange markets to “operate freely and effectively, with the least possible intervention,” according to Robertsen.