The outgoing group chairman of Standard Chartered Jose Vinals on Tuesday, March 18, at a media briefing in Hong Kong, where the bank’s international advisory council hosted a meeting, said that the President of the United States Donald Trump is unlikely to impose the so-called super tariffs on China and noted that the current configuration of Washington’s tariff policy may become a factor contributing to the formation of new trade links and business opportunities in Asia, the Middle East and Africa.
Jose Vinals underlined that tariffs have a negative impact on global economic growth and global trade. He also stated that, in his opinion, Washington’s levies on Beijing are unlikely to reach 60%. It is worth noting that the market is very afraid that the mentioned indicator will become a reality.
The claim that the tightening of tariff policy may contribute to the development and scaling of trade links in Asia is somewhat controversial. In this context, it is worth noting that not all countries in the region are friendly partners, including economic ones, concerning each other. It is also highly likely that concerns about various kinds of restrictions from the United States may be a deterrent in the context of the development of trade links. Some Asian countries, for example, may fear active cooperation with China due to Washington’s potential reaction. So far, this is more of a theoretical assumption than a statement reflecting the already existing conditions and circumstances of reality. However, the growing tensions between Beijing and Washington may deter some Asian countries from large-scale cooperation with China. The mentioned tension may provoke certain sanctions and other restrictions from the United States. The specified measures may also affect Beijing’s economic partners. This as yet potential possibility may already be a deterrent to the development of trade cooperation between countries within Asia. The assumption of tariffs as a factor contributing to the creation of new trade links in the mentioned region, if confirmed as reality, is likely to be on a kind of partial scale.
This month, Donald Trump imposed 25% tariffs on imports of certain goods from mainland China, Mexico, and Canada. Jose Vinals stated that a 10% duty could reduce China’s gross domestic product (GDP) by about 1%-1.5%. According to him, domestic policy measures can be a tool to counteract this. He also noted that China already has a quite diversified supply chain, which limits the impact of tariffs. In his opinion, Mexico, Canada, and the European Union will find new trading partners to counter the levy.
Jose Vinals also stated that there would be less trade between the rest of the world and the United States and more trade between the rest of the world. According to him, he can see more trade between Asia and the Middle East, between Asia and Africa, and between Asia and Latin America as a result of the tariffs.
Moreover, Jose Vinals stated that Hong Kong would be Standard Chartered’s leading market to capture the international trade and wealth management business. According to him, the mentioned city is a superconnector between China and the rest of the world.
Standard Chartered reported that its underlying pre-tax profit grew by 19% last year, to $6.8 billion. Of this, 34% came from Hong Kong. Jose Vinals stated that during his visit to the mentioned city, he noticed a stark difference between the present situation and the state of affairs which was observed when it was the coronavirus pandemic. According to him, Hong Kong International Airport is currently buzzing, and traffic on the roads signals that the city has fully recovered after the pandemic-led slowdown.
Jose Vinals stated that Standard Chartered continues to see formidable opportunities in Hong Kong and China.
Hong Kong is an important financial hub in the Asia-Pacific region. This is facilitated by the advantageous geographical location of the city, which ensures its significant role in logistics, and well-developed infrastructure.
As we have reported earlier, Hong Kong to Ease IPO Rules for Mainland Chinese Companies.
