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 as 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 critical, Robertsen said in an interview with CNBC’s “Squawk Box Asia” on Monday.
“I don’t think that means that they will abandon some of the tactics that the Trump administration used,” he said.
“The Biden team has made it very clear that they think the rate strategy was flawed. That being said, I don’t think they will reverse it tomorrow either,” he noted, adding that “they will use 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 kept the tariffs that were, you know, set by the Trump administration.” However, he added that the Biden administration will evaluate how to proceed in the future.
The White House also said last month that it would review all national security measures implemented by the Trump administration, including the Phase 1 trade agreement between the United States and China.
Trump signed the initial trade deal with Chinese President Xi Jinping in January 2020, stopping a nearly 18-month-long trade war in which hundreds of billions of dollars worth of US and Chinese goods were hit by retaliatory tariffs.
Areas of cooperation between the United States and China
Despite the current trade tensions between the world’s two largest economies, Robertsen is optimistic about improving relations between the two countries.
“I see some potentially common areas between the US and China, climate is one of them. This is an area where both countries could make significant improvement commitments and that could lay the groundwork for further engagement in others areas, “he said. saying. “I’m relatively optimistic that over the course of 12 to 24 months, you will see a better narrative of US-China relations.”
Additionally, Robertsen noted that the Biden administration is unlikely to use the coin as a tool to influence its trading agenda.
“We believe that 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 that particular tactic.”
Last year, the US Department of the Treasury under Trump labeled Switzerland and Vietnam as currency manipulators. It also added India, Thailand and Taiwan to a list of countries that it says could be deliberately devaluing their currencies against the US dollar. A weak currency makes a country’s exports cheaper internationally, which in turn makes them more attractive.
The Biden administration wants the currency markets to “operate freely and efficiently, with as little intervention as possible,” according to Robertsen.