[270221.EN.BIZ] Don't Expect Radical Changes in US China Policy, Says StanChart

 

DON'T expect US President Joe Biden to much change former president Donald Trump's hardline policy on China, warned the Standard Chartered Bank's chief strategist Eric Robertsen.

"The Biden team has made it clear they think that the tariffs strategy was flawed. That being said, I don't think they're going to reverse it," he said in a CNBC television interview, adding that "they will use it as part of a broader negotiating strategy."

In addition, Mr Robertsen noted that it is unlikely the Biden administration will use currency as a tool to influence its trade agenda.

Even as President Joe Biden and his team are focused on improving domestic growth, they recognise it is critical to create conditions for global trade to thrive, Mr Robertsen.

"I don't think that means they will abandon some of the tactics that were used by the Trump administration," he said.

US Treasury Secretary Janet Yellen said in another CNBC interview: "For the moment, we've kept the tariffs in place that were, you know, put in place by the Trump administration." However, she added that the Biden administration will evaluate how to proceed going forward.

Despite current trade tensions between the world's two largest economies, Mr Robertsen is optimistic about improving relations between the two countries.

"I do see some areas for potentially common ground between the US and China, climate being one of them. This is one area where both countries could make significant commitments to improvement and that might lay the groundwork for more compromise in other areas," he said.

"I'm relatively optimistic that over the course of 12 to 24 months, you will see a better narrative of US and China relations."

In addition, Mr Robertsen noted that it is unlikely the Biden administration will use currency as a tool to influence its trade agenda.

"It is our belief that the Trump administration used this label of currency manipulator as one of many tools to try and help them achieve 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 it says may be deliberately devaluing their currencies against the US dollar.

The Biden administration wants currency markets "to operate freely and effectively, with as little intervention as possible," according to Mr Robertsen.

Source : HKSG / Graphic : FT.