Changes in government leadership following an election can often lead to some uncertainty, but Oxford Economics lead Asian economist Sian Fenner does not expect President-elect Joe Biden’s administration to be a game-changer in the region. If anything, a departure from US president Donald Trump’s more erratic and confrontational approach to diplomacy could provide a positive tailwind to Asia’s economic recovery while supporting regional currencies. 

“With Joe Biden set to become the next US president in January 2021, it removes some of the downside risks to our Asia’s economic outlook. A Donald Trump victory would most likely have led to an even more protectionist stance, with new tariffs imposed on Chinese imports and somewhat unpredictable actions to decouple both economies,” writes Fenner in a report on 11 November 2020. 

Fenner expects less uncertainty over US trade policy towards China and a more multilateral approach to trade under Biden, reducing volatility and boosting investor sentiment. The risk of punitive tariffs being used as an instrument of negotiation will likely be lower than under Trump, though the Democratic President-elect is likely to be cautious about rolling back Trump’s trade and investment restrictions. Tariffs are likely to remain in the short-run, but Fenner sees Biden eventually rolling back 25% steel tariffs and 10% aluminum tariffs. 

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