Tariffs on hundreds of billions of dollars of Chinese imports are due to expire in July, and Biden has faced growing calls to get rid of the punitive duties to help combat the highest US inflation in more than four decades.
Biden’s comments today during a visit to Tokyo come after Treasury Secretary Janet Yellen last week said some of the duties imposed by former president Donald Trump “seem to impose more harm on consumers and businesses” and do little to address real issues posed by the Asian giant.
The president also said a recession in the United States was not inevitable but acknowledged the economic pain felt by American consumers, saying “this is going to take some time”.
Ending the tariffs could help cut roaring US inflation by making imports cheaper.
Biden also announced that 13 countries had joined a new, US-led Asia-Pacific trade initiative, although there are questions about the pact’s effectiveness.
Investors will be looking to the release on Wednesday of notes from the latest Federal Reserve committee meeting for clues on further rate hikes by the US central bank.
Trade was cautious in Asia after Wall Street briefly dipped into a bear market Friday, with the S&P 500 index down about 19 per cent from its January high. Tokyo closed 1.0 per cent higher, while Shanghai ended flat. Hong Kong fell 1.2 and Singapore was down 0.6 per cent but most other Asian markets saw gains, with Seoul, Bangkok, Taipei and Mumbai in the green.
Sydney ended marginally higher following a weekend election that saw the centre-left Labor party end a decade of conservative rule.
The new government of Prime Minister Anthony Albanese is expected to undertake some policy shifts, particularly on climate change, but economists said they were unlikely to upset growth forecasts.
An interest rate cut by Beijing did little to cheer Chinese markets, with investors concerned about continuing Covid restrictions that are hurting the world’s second-largest economy and snarling international supply chains.
European markets opened higher despite lingering concerns over inflation, with London up 0.8 per cent, Frankfurt 1.4 per cent higher and Paris adding 0.7 per cent.
Downcast earning reports from retailers have also heightened market uncertainty at a time of rising interest rates, surging energy prices and Russia’s ongoing war in Ukraine, which is driving commodity prices higher.
“As macro-economic concerns stemming from aggressive monetary tightening, the Russia-Ukraine conflict and China’s stringent Covid lockdowns persist, we anticipate great volatility in the market,” Louise Dudley, portfolio manager global equities at Federated Hermes, said in a note, Bloomberg News reported.
Oil was higher, with US crude benchmark WTI up 0.9 per cent and Brent gaining 1.0 per cent.
The invasion of Ukraine has shaken up the global market and the outlook for key producer Russia, which has been largely shunned by Western countries.
“Concerns over demand destruction appear to be limiting the upside, while threats of oil embargoes are keeping a floor under the downside,” said Michael Hewson, chief market analyst at CMC Markets. — AFP
- When asked at a joint press conference with Japanese Prime Minister Fumio Kishida whether the U.S. would be prepared to defend Taiwan if attacked, Biden replied: “Yes.”
- Taiwan’s foreign ministry thanked Biden for reaffirming U.S. support if Beijing invaded the island.
- However, China’s foreign ministry said the U.S. should not defend Taiwan independence, Reuters reported.
When asked at a joint press conference with Japanese Prime Minister Fumio Kishida whether the U.S. would be prepared to defend Taiwan if attacked, Biden replied: “Yes.”
Taiwan’s foreign ministry thanked Biden for reaffirming U.S. support if Beijing invaded the island. However, China’s foreign ministry said the U.S. should not defend Taiwan’s independence, Reuters reported, adding that Beijing has no room for compromise or concessions relating to matters of sovereignty and territorial integrity.
Taiwan and mainland China are separated by the Taiwan Strait, which is only about 100 miles wide (160 km) at its narrowest point. China claims Taiwan as part of its own territory and has been putting pressure on the democratic island to accept its rule.
A break from ‘strategic ambiguity’
Biden’s comments appeared to break Washington’s long-held tradition of “strategic ambiguity” on Taiwan, whereby the White House had been intentionally vague on whether it would come to the island’s aid if China invaded. The aim of this policy had been to ward off the mainland from taking military action, without the U.S. committing itself to war.
A White House official said Biden’s comments did not reflect a policy shift.
However, the U.S. also maintains a “robust unofficial” relationship with Taiwan, and Washington supplies military equipment to the island in accordance with the 1979 Taiwan Relations Act. This act does not require the U.S. to intervene militarily to defend Taiwan if China invades, but makes it a policy to ensure the island has the resources to defend itself and to deter Beijing from unilaterally unifying the island.
China has stepped up its military provocations with Taiwan in recent years in an ostensible effort to intimidate what it sees as a rogue province into accepting Bejing’s demands to unify with the mainland.
Taiwan, and the view of the island through the lens of Russia’s onslaught in Ukraine, came up several times throughout Biden’s press conference with Kishida.
Japan’s leader said that the two countries’ position on Taiwan remains unchanged and “underscored the importance of peace and stability of Taiwan Straits, which is an indispensable element for peace and prosperity of international communities.”
At the start of the year, one political analyst singled out the tense relationship between the U.S. and China over Taiwan as the top risk for Asia in 2022. CNBC
AFP / CNBC