It’s not just the coronavirus pandemic and the economic recovery that President Joe Biden has to contend with in his early days in the White House.
After the contentious U.S. relationship with China under President Donald Trump, the new administration has to determine how it will approach thorny issues with the country such as intellectual property and fair trade.
“The relationship is going to remain competitive but not as confrontational, and Biden has made it very clear that he wants to return to multilateral discussions, he wants to engage Europe,” Joyce Chang, chair of global research at JPMorgan, told CNBC’s “Trading Nation” on Tuesday.
White House press secretary Jen Psaki told reporters on Monday that the Biden administration will emphasize “patience” in its relationship with China, which includes an evaluation of the tariffs currently being imposed.
Chang expects no further tariffs on China, though does not anticipate existing levies to be removed quickly. She also sees Biden tying human rights and democracy violations to how the administration tackles economic issues.
One wrinkle in the U.S. negotiating power: China’s economy has rebounded from the pandemic faster than many expected.
“China’s exports expanded during 2020 during Covid-19. They were first in and first out, so their manufacturing and their export quality was in better shape. There’s also a lot of demand for the medical supplies, personal protective equipment, and also tech exports, which are almost 30% of China’s exports,” said Chang.
China’s GDP bounced 6.5% in the fourth quarter, higher than analysts’ estimates of 6.1% growth. For 2020, the Chinese economy grew 2.3%.
U.S. GDP is expected to have rebounded 4.2% in the fourth quarter, according to FactSet analysts, but down 3.5% for 2020. An initial read on fourth-quarter GDP is scheduled for Thursday.
