US President Donald Trump is unlikely to impose “super tariffs” on China, although his trade policies could create new trade links and business opportunities in Asia, the Middle East and Africa, according to the outgoing group chairman of Standard Chartered.
While Trump’s imposition of higher tariffs on Canada, China and Mexico have led to tit-for-tat responses and clouded the outlook for global growth, Jose Vinals played down the fears of a prolonged and debilitating trade war.
“Tariffs are negative for global growth and global trade, but my hope, and also my guess, is that we are not going to have a ‘super tariff’ on China,” Vinals told a media briefing on Tuesday in Hong Kong, where the bank’s international advisory council hosted a meeting.
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He believed the tariffs on China were unlikely to reach 60 per cent as feared by the market, as these tariffs would be modified after negotiations.
Trump this month imposed tariffs of as much as 25 per cent tariffs on certain goods from mainland China, Canada and Mexico.
Vinals said a 10 per cent tariff could reduce China’s gross domestic product (GDP) by about 1 to 1.5 percentage points.
“This is something that can be countered by domestic policy measures,” he said. “China already has quite a diversified supply chain, which limits the impact of the tariffs.”
As for Mexico, Canada and Europe, he said they would find new trading partners to counter the levy.
“There will be less trade between the rest of the world and the US, and more trade between the rest of the world,” he said. “I 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.”
The London-based emerging-markets focused lender, which has operations in more than 50 markets in Asia, the Middle East and Africa, was in a good position to help clients develop new cross-border trade relationships, Vinals said.
Hong Kong would be Standard Chartered’s leading market to capture international trade and wealth management business, he added, pointing to the city’s role as a “superconnector” between China and the world.
Standard Chartered reported a 19 per cent increase in underlying pre-tax profit to US$6.8 billion for 2024. Of this, 34 per cent came from Hong Kong, its biggest market.
