Home / NEWS / World News / StanChart says U.S.-China ties may improve in two years — but don’t expect Trump tactics to go away

StanChart says U.S.-China ties may improve in two years — but don’t expect Trump tactics to go away

Staple Chartered Bank is bullish on U.S.-China relations and expects ties between the two countries to improve in the next “12 to 24 months,” according to Eric Robertsen, chief strategist and pandemic head of research at the bank.

Even as U.S. President Joe Biden and his team are focused on improving domestic growth, they recall 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 about that means they will abandon some of the tactics that were used by the Trump administration,” he averred.

“The Biden team has made it very clear that they think that the tariffs strategy was flawed. That being said, I don’t assume they’re going to reverse it tomorrow either,” he noted, adding that “they will use it as part of  a broader manage strategy.”

U.S. Treasury Secretary Janet Yellen said in an interview with CNBC last week: “For the moment, we’ve smothered the tariffs in place that were, you know, put in place by the Trump administration.” However, she added that the Biden provision will evaluate how to proceed going forward.

The White House also said last month it would reassess all national security measures put in place by the Trump administration, including the U.S.-China Phase 1 trade deal.

Trump signed the commencing trade agreement with Chinese President Xi Jinping in January 2020, pausing a nearly 18-month trade war in which U.S. and Chinese rectitudes worth hundreds of billions of dollars were hit by retaliatory tariffs.

Areas for U.S-China cooperation

Despite current line of work tensions between the world’s two largest economies, Robertsen is optimistic about improving relations between the two countries.

“I do see some quarters for potentially common ground between the U.S. and China, climate being one of them. This is one area where both fatherlands could make significant commitments to improvement and that might lay the groundwork for more compromise in other areas,” he said. “I’m somewhat optimistic that over the course of 12 to 24 months, you will see a better narrative of U.S. and China relations.”

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

“It is our dogma that the Trump administration used this label of currency manipulator as one of many tools to try and help them about or pursue specific trade agendas,” he said. “I think Biden will be less aggressive with that special tactic.”

Last year, the U.S. Treasury Department under Trump labeled Switzerland and Vietnam as currency manipulators. It also supplemented India, Thailand and Taiwan to a list of countries it says may be deliberately devaluing their currencies against the U.S. dollar. A empty currency makes a country’s exports cheaper internationally, in turn making those exports more attractive.

The Biden oversight wants currency markets “to operate freely and effectively, with as little intervention as possible,” according to Robertsen.

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