StanChart says Trump ‘assault’ on WTO may set trade back decades
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Karachi/London: Standard Chartered Plc’s Bill Winters, who runs one of the biggest trade-finance banks in the world, said US President Donald Trump risks reversing decades of progress in globalization if he attacks the World Trade Organization or starts imposing border taxes on trading partners.
Deep antagonism between the US and a given trading partner, or “a fundamental assault on the multilateral trading systems, the WTO most obviously—those would be very bad outcomes,” Winters, the former head of JPMorgan Chase & Co.’s investment bank, told reporters at Standard Chartered’s main office in Karachi, Pakistan, on Thursday. “If the WTO loses its effectiveness as a mediating trading body, it’ll be undoing 30 years of progress in global trade.”
Winters, Standard Chartered’s 55-year-old chief executive officer, said last month that the bank was “war-gaming” trade disruptions that some of Trump’s policies could cause. The Asia-focused lender has a lot staked on the future of trade, as its executives are attempting to persuade investors they can restore revenue growth after years of missing targets and incurring fines for misconduct.
The CEO reiterated he didn’t think a full-blown trade war was likely. He said the most probable actions taken by the US would include tariffs or other barriers against specific countries such as China and Mexico, causing little knock-on impact to the global economy. However, he said it’s hard to predict what could happen given the rhetoric used by Trump and his top advisers.
“We could end up with something that’s closer to the narrative we heard during the election, especially with a much more aggressive border adjustment type system that has embedded in it substantial tariff barriers—we’re talking 20%, that’s very material,” Winters said. “Or a bilateral spat that gets out of control” with one of the US’s major trading partners, he said.
If Trump does start a fight with China over trade, investment would be driven out of the US and Europe and into Asia, where China would take the lead role in a super-regional trade bloc, Winters said 24 February. China’s standing in Asia was already bolstered when the US pulled out of the Trans-Pacific Partnership, he said.
“In the short term those sorts of scenarios could be bad for us,” Winters said. “Can the rest of intra-Asian, South Asian, African, Middle East trade offset the decrease from the US? No. The US is the biggest market in the world by far, certainly the biggest importer in the world by far. It would be damaging to the world economy, it would be damaging to the economies in this region.” Bloomberg