(Bloomberg) — US President Joe Biden said he’ll review Trump-era tariffs imposed on imports from China amid growing calls from businesses to remove the levies, fueling a rally in the .

Biden said he’s considering removing some of the tariffs and would talk with Treasury Secretary Janet Yellen about it after returning to the US from Asia. “We did not impose any of those tariffs — they were imposed by the last administration,” he said at a press conference in Tokyo Monday.

In response, the offshore yuan rose as high as 0.7% and hit its highest level since May 5. This was after an increase of 1.5% last week as a result of looser lockdowns in Shanghai, and stronger sentiment following a Friday reduction in the key lending rate by Chinese banks.

“A reduction of US-China tariffs is taken to be positive for US-China relations and that translates to yuan gains,” said Fiona Lim, a senior currency analyst at Malayan Banking Bhd. “However, we are wary that mentions of tariff reduction have surfaced time and again,” she said.

In the midst a US-China Trade War that began in 2018, and ended in January 2020, the Yuan was below 7 USD. The currency then strengthened when the two countries signed a trade agreement. Following an investigation by the US, it imposed tariffs upon more than $300 billion worth of Chinese imports. This was in response to China stealing intellectual property rights from American companies. It also required them to transfer technology. China responded to the US investigation by adding its own tax on imports. 

A rollback of US tariffs would be positive for China’s exports, but supply chain disruptions and factory shutdowns due to Covid Zero in China could significantly limit the benefits from any potential reductions, economists including Aichi Amemiya at Nomura Securities International wrote in a note last week. 

At 4:22 in Hong Kong, the offshore yuan rose 0.5% and was at 6.6673 USD. The onshore unit climbed 0.5% to 6.6615. The yuan was supported by stop losses on the currency’s short positions, according to traders who asked not to be identified because they aren’t authorized to speak publicly.

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Most of Trump’s tariffs have been maintained by the Biden administration. The president is under increasing pressure by economists, lawmakers, and the US Chamber of Commerce for the reduction or elimination of tariffs. 

Biden earlier this month stated that he was weighing the possibility of reducing US tariffs on imported goods to curb inflation. U.S. economists say lifting the tariffs would help to ease inflation, but aides within the administration don’t want to suspend tariffs and risk appearing soft on China ahead of the November congressional elections. 

Other Asian currencies and the Australian dollar received a boost from Biden’s comments. It rose to as high as 1.2% at 0.7126 per greenback.

Any easing of tensions between the US and China could set a more benign environment for constructive Australia-China relations as well, Maybank’s Lim added.

(Updates throughout)

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