US companies see new era under Biden

By Xie Jun Source: Global Times Published: 2020/11/24 19:23:40

Analysts say tariffs, some sanctions to be lifted

Joe Biden. Photo: VCG

US multinationals aim to clear away a stumbling block, the Trump administration's protectionism and anti-globalism, to push forward their international plans, in particular their exploration of the Chinese market, experts said. They made the comments in response to news that New York business leaders signed a letter urging the Trump administration to start the power transition to the incoming Biden administration. 

They also predicted that many of the prejudicial and disruptive policies launched by the Trump administration against China, like sanctions on Huawei and tariff hikes, will be corrected once Biden becomes the new US president. 

More than 160 top US executives have signed a letter pressing the Trump administration to acknowledge Joe Biden as the president-elect and begin the transition to the new administration, according to a report by The New York Times. Most of the executives come from US multinationals including Mastercard, Visa, Condé Nast, WeWork and American International Group. 

Many top executives from US financial companies have signed the letter, including David Solomon, chief executive of Goldman Sachs and Jon Gray, Blackstone's president. 

According to a CNBC report, General Services Administration chief Emily Murphy on Monday confirmed that the Trump administration is making federal resources available for Biden's transition into office, meaning that the US government has officially begun its transition, after weeks of legal challenges to the election results. 

Song Guoyou, deputy director of the Center for American Studies at Fudan University, said that pressure from US business elites as well as Republicans has made US President Donald Trump realize that his fight to overturn the election is of no avail, and this was one of the reasons that caused him to accept the power transition. 

Although it's unclear what role the business leaders' letter played in Trump's decision to yield, heavyweight US companies have clearly been hankering to get rid of the Trump-initiated policies that have hurt their interests tremendously, said Dong Dengxin, director of the Finance and Securities Institute at Wuhan University of Science and Technology.

"The biggest beneficiaries of globalization are US multinationals that have pushed costs down by creating manufacturing bases outside of the US and making profits by entering huge and growing markets like China," added Dong. "Trump's actions, including setting up trade and investment barriers, is actually eating into their profits."

Song also said that Trump's policies have harmed US companies' normal operations, not only in overseas markets including China, but also in the US itself by causing too many uncertainties. 

Many of the companies that urged Trump to begin the transfer of power either have mature businesses in China, or are nurturing plans to benefit from the giant market. For example, US publication giant Condé Nast  was working with Chinese mainland publishers to publish magazines as early as 2005. US-based operator of shared work spaces WeWork also has operations in a number of Chinese cities. 

Financial firms like Citi and BlackRock have made inroads into the Chinese market. Citi acquired a domestic fund custody license, while BlackRock won approval to start a mutual-fund business in China, paving the way for it to become one of the first foreign investment firms to start managing money for Chinese individuals. 

"Given that many US financial firms are casting covetous eyes on the Chinese market and are anxious to bank on China's financial opening-up, they want to brush aside policy obstructions as soon as possible," Dong noted, predicting that US capital inflows into China would increase after Biden assumes office. 

Dong also predicted that many Chinese companies, like Huawei, should be able to escape the difficulties caused by Trump's protectionist policies. 

"The Biden administration will remake Trump's policies extensively, and though he will still see China as an economic competitor, Biden is unlikely to use hardcore sanctions to crack down on Chinese businesses," Dong said, adding that he anticipated the additional trade tariffs imposed by Trump will also be lifted, and US companies' business links with China will be restored. 


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