Aberdeen chairman Douglas Flint said China is “not going to back down” in its trade and tariff dispute with US president Donald Trump.
Flint said he does not believe globalisation is dead, but added: “… we need to find a way to make globalisation work better.”
Flint has extensive experience of China from his years as chairman of HSBC. Edinburgh-based investment giant Aberdeen manages and administers about £511 billion of global assets.
China and the US are locked in a trade battle, with the Trump administration putting tariffs of 145% on most Chinese imports earlier this month. Beijing responded with its own 125% tariffs on American products going to China.
Last weekend, a US customs notice said smartphones, computers and other electronic devices would be excluded from the 125% tariff on goods entering the country from China.
However, Trump said later on social media there was no exemption for these products and called such reports false.
In an interview with Peel Hunt, Flint said: “I actually think though that tariffs are actually a symptom of an issue … a symptom of an administration that is trying to change the global order … I think it’s an administration that is clearly trying to put pressure on China …
“But I also think … we’ll look back in history and sort of say ‘was this the moment where US exceptionalism and the fact that it was the one place you could rely on, you could rely on the dollar, it was the safe asset and so on, is actually … called into question?”
Asked if he was surprised at China’s response to Trump’s tariffs, Flint replied: “I wasn’t surprised …
“I know from my own experience that they will have gone through every possible set of tariff impositions … and they will have a playbook as to what they would do in response.
“I think anyone (with) knowledge of China knows that they’re not going to back down.
“They’re not going to be humilitiated by somebody telling them what to do.
“They operate in a world where they describe it as ‘win win’ and they are up against an administration that believes that winning is someone else losing, and I think that’s a very difficult position to reconcile.
“So I think we are in a very difficult situation at the moment because it doesn’t look as if either side is particularly keen to step back.
“I think the trick will be whether something can be constructed where both sides can …. believe that they have acheived something ..
“I don’t believe globalisation is dead … we need to find a way to make globalisation work better … this is a wake up call … “