Joe Biden and Global Trade
Here are a few issues we’re tracking as we look at what to expect now that there’s a projected change in the occupancy of the White House.
No more arbitrary tariff and related threats?
From Canada to Europe to China, many believe that a Joe Biden presidency means we’ve seen the last of tariffs imposed without warning. Whether on steel and aluminum, airplanes or a wide array of other goods, Donald Trump brought unpredictability, instability, and simplicity to global trade. For many countries, getting rid of that alone will be a welcome change from their point of view.
What’s next on China
One issue that will for sure be watched closely is what a Biden administration does on U.S.-China relations. Biden supporters say he will be tougher than Donald Trump. Trump boosters refer to him pejoratively as “Beijing Biden”. One thing is for sure: Donald Trump’s “tough-on-China” approach is politically popular in the U.S., especially in the Rust Belt. No one in the U.S. voted for a new approach on China. On these issues, a Biden administration will have to tread carefully.
Will the US rejoin TPP?
As vice president, Joe Biden was a keen booster of the Trans-Pacific Partnership, now called the Comprehensive Progressive Trans-Pacific Partnership (CPTPP). The Obama administration made the TPP a central plank in its strategy to set the rules for trade in the Asia-Pacific in part to help counter a rising China. Donald Trump pulled out of the pact saying it was bad for American jobs. Joe Biden also vows to protect jobs especially in the Rust Belt states that he just won narrowly to put him in the White House. Again, expect a Biden presidency to tread slowly on this one.
Will Biden support WTO modernization?
As we’ve discussed previously, the WTO is a mess. Virtually everyone agrees reform is badly needed. However, the Trump administration helped put it on life support by refusing to appoint judges to the Appellate Body which rendered it useless. Countries around the world have put a band-aid fix in place but an effective WTO must be able to resolve trade disputes if it is to remain relevant. We expect this is one area where a Biden administration will break from the Trump approach.
America First is here to stay
Above all else, there remains a strong protectionist bent across the U.S., especially throughout the Rust Belt. Both Republicans and Democrats alike remain committed to an America First agenda. As much as it may disappoint true believers in free trade, protectionism has proven to have political appeal. For countries around the world that believe things will return to pre-Trump “normal” they had better think again. America First is now the unofficial trade policy of the United States irrespective of who is president.