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,” said Eric Robertsen, chief strategist and global chief of research at the bank.
Even as US President Joe Biden and his team are focused on enhancing domestic growth, they recognize the critical importance of creating conditions for global trade to thrive, Robertsen said in an interview with CNBC’s “Squawk Box” Monday. Asia “.
“I don’t think this means they will give up some of the tactics used by the Trump administration,” he said.
“The Biden team has made it very clear that they think the pricing strategy was flawed. Having said that, I also don’t think they will roll it back tomorrow,” he noted, adding that “they will be using it as part of a broader negotiation strategy. “
US Treasury Secretary Janet Yellen said in an interview with CNBC last week, “For now, we have maintained the tariffs that, you know, were put in place by the Trump administration.” However, she added that Biden’s administration will evaluate how to proceed.
The White House also said last month it would review all national security measures taken by the Trump administration, including the US-China phase 1 trade deal.
Trump signed the first trade deal with Chinese President Xi Jinping in January 2020, interrupting a nearly 18-month-long trade war in which hundreds of billions of dollars worth of US and Chinese goods were affected by retaliation.
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 may have interfaces, including climate. This is one area where both countries can make significant commitments for improvement and that could lay the groundwork for more compromises in other areas,” he said. said. “I am relatively optimistic that over the course of 12 to 24 months you will see a better story about US-China relations.”
Additionally, 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 has used this label of currency manipulator as one of many tools to help them reach or pursue specific trade agendas,” he said. “I think Biden will be less aggressive with that particular tactic.”
Last year, the US Treasury Department under Trump labeled Switzerland and Vietnam as currency manipulators. It also added India, Thailand and Taiwan to a list of countries that it says are intentionally devaluing their currencies against the US dollar. A weak currency makes a country’s exports cheaper internationally, making those exports more attractive again.
The Biden government wants currency markets to “operate freely and effectively, with as little interference as possible,” said Robertsen.