Standard Chartered Bank is optimistic for U.S.-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.
While U.S. President Joe Biden and his team are focused on improving domestic growth, they recognize that it is critical to create conditions for world trade to thrive, Robertsen said in an interview with CNBC’s “Squawk Box Asia.” Monday.
“I don’t think that means they will abandon some of the tactics that the Trump administration used,” he said.
“Biden’s team has made it very clear that they believe the tariff strategy was flawed. That said, I don’t think they will reverse it tomorrow,” he said, adding that “they will use it as part of a strategy. broader negotiation “.
U.S. Treasury Secretary Janet Yellen said in an interview with CNBC last week, “For now, we’ve kept the tariffs set by the Trump administration, you know.” However, he added that the Biden administration will assess how to proceed.
The White House also said last month that it would review all national security measures taken by the Trump administration, including the trade agreement between Phase 1 and the United States and China.
Trump signed the initial trade deal with Chinese President Xi Jinping in January 2020, pausing a nearly 18-month trade war in which hundreds of millions of dollars worth of U.S. and Chinese goods were affected by tariffs. of retaliation.
Areas of US-China cooperation
Despite current trade tensions between the two largest economies in the world, Robertsen is optimistic about improving relations between the two countries.
“I see some areas for potentially common ground between the United States and China, the climate is one of them. This is an area where both countries could make significant improvement commitments and they could lay the groundwork for a more commitment in other areas, ”he said. dit. “I am relatively optimistic because, 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 administration is unlikely to use the currency as a tool to influence its business agenda.
“We believe the Trump administration used this currency manipulator label 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, Trump’s U.S. Treasury Department labeled Switzerland and Vietnam as currency manipulators. He also added India, Thailand and Taiwan to a list of countries that he says may be deliberately devaluing their currencies against the US dollar. A weak currency makes a country’s exports cheaper internationally, which makes those exports more attractive.
According to Robertsen, the Biden administration wants foreign exchange markets to “operate freely and efficiently, with as little intervention as possible.”