WASHINGTON (AP) – During his first term in office, President Biden wasted no time in dumping a number of key Trump administration policies. He rejoined the Paris climate agreement. He ended a ban on travelers from mostly Muslim countries. He canceled the Keystone XL oil pipeline. He overturned a ban on transgender people serving in the military. And so on.
However, Biden and his team are on the verge of turning one of Donald Trump’s most divisive distinctive legacies: his go-it-alone action to start a trade war with China and some of America’s closest allies with ‘ to destroy a storm of tariffs on their steel, aluminum. and other goods. In the seven decades of presidential support for free trade, Trump has promised to reduce the US trade deficit and repair millions of lost American factory opportunities.
In the end, according to most accounts, the Trump tariffs achieved very little – and managed to counter some of America’s closest trading partners.
Yet it seems the Biden government intends to approach trade with caution and deliberation. Perhaps most striking is what Biden did not do: he did not put off Trump’s trade war with China. He did not promise to scale back or cancel his tariffs on imported metals or end a stalemate that could not allow the World Trade Organization to function as an arbitrator in global trade disputes.
Instead, government policymakers are focusing on other, unrelated priorities – to spread COVID-19 vaccines as quickly as possible and provide much more aid to an economy with pandemics that have lost nearly 10 million jobs since February has.
“He’s going to take his time,” said Mary Lovely, an economist at Syracuse University, a senior fellow at the Peterson Institute for International Economics. “Biden has repeatedly said that he needs to be stronger before tackling many of these trade issues. ‘
One factor may be that reversing all of Trump’s policies could increase the risks for a Democrat close to unions who are dissatisfied with America’s free trade consensus before Trump. Politically, Biden is dependent on support in manufacturing towns and cities in the Middle East. These areas suffered from the low prices of imports from China, Mexico and elsewhere.
“There is competition for the swing state voters who are in favor of (trade) protection,” said Daniel Ikenson, director of trade policy studies at the libertarian Cato Institute.
Democrats are still stung by Trump’s surprise victory in 2016 and some of the trade-related factors behind it. Trump has abandoned the support of the modern Republican Party for free trade agreements, which is favored by American companies that have deep ties overseas. Instead, Trump saw himself as a populist defender of long-suffering manufacturing workers – an ‘America-first’ champion who would eradicate unfair trade practices and restore American factory work.
For the Democrats, Trump’s victory in 2016, which is not only due to blue-collar voters, gave a ‘hard lesson’ about the dangers of a trade policy that does not think of working people, but (to take advantage of) finances and agribusiness’, said Lori Wallach, director. of Public Citizen’s Global Trade Watch.
Mindful of the lesson, Biden’s team, led by a president who is seldom tired of reaffirming his lifelong ties to the working class America, promised a trade policy that would create or protect American jobs.
“We will use trade, in conjunction with both international and local economic instruments, to create a more inclusive prosperity for America and Americans,” Katherine Tai, Biden’s choice to be the US Trade Representative, said in a speech last month. told the National Foreign Trade. Council.
According to Biden, Biden’s vision is to implement a trade – centered trade policy. ‘
The new president has promised at least one significant change in Trump’s US trade position: Biden wants to improve relations with key US allies, such as the European Union and Canada, which have been embittered and outraged by Trump’s merciful and belligerent rhetoric and actions .
Finally, anyway.
“The mantra was: no sudden movements” about trade – and rather focused on fighting the pandemic and providing more economic relief, said William Reinsch, a former US trade official who is now at the Center for Strategic and International Studies , said.
Consider Trump’s tariffs on foreign steel and aluminum, which he introduced in 2018. Reducing or lowering the load seems like an easy way to heal wounds.
America’s allies were particularly angry at Trump’s dubious justification for the sanctions: to dust off a little – used trade instrument – Section 232 of the 1962 Trade Expansion Act – he declared their aluminum and steel a threat for American national security would be. It was a burning insult to join allies like Canada who fought with the United States in conflict from World War I to Afghanistan.
Yet the government of Biden has little inclination to speak quickly on the matter. At her confirmation hearing, incoming trade secretary Gina Raimondo evaded a question about the metal tariffs. She has to sen. Roy Blunt, R-Mo., Said she would consider his opinion that Missouri manufacturers were hurt by the tariffs and that they would consider their needs.
With political pressure on the other hand, a coalition of steel companies and workers wants to maintain the tariffs. They sent a letter to Biden last month, arguing that they urgently needed help in an economy weakened by COVID.
“Setting tariffs is always easier than lifting them,” said Wendy Cutler, a former U.S. trade negotiator who is now vice president at the Asia Society Policy Institute.
Biden even chose last week to reintroduce aluminum tariffs on the United Arab Emirates that Trump lifted when he left office. Trump, who apparently rewarded the UAE for his move to recognize Israel diplomatically, replaced the tariffs with UAE aluminum quotas.
“Imports from the United Arab Emirates,” the White House said in a statement, “could continue to displace domestic production and thereby threaten our national security.”
If the government finally decides to lower or end the metal tariffs, it can offset the impact by introducing a public work program that requires a lot of steel and aluminum. Or it could be the benefits of a Buy American print that Biden announced, aiming to channel more federal dollars to support U.S. industries.
Nor can the administration consider abandoning the controversial national security tariffs – but in a different way: fighting climate change.
In August, Peter Harrell, the incoming international economic adviser to Biden’s National Security Council, argued that if Congress did not respond, the president could use Article 232 to levy tariffs on products and countries that pollute the air or to invest. block. in projects that pollute the environment.
Trump’s use of the tariffs ‘has created a clear opening for a future Democratic president to introduce far-reaching tariffs and sanctions to combat climate change,’ Harrell writes in Foreign Policy magazine.
The Biden team will also have to decide whether to reconsider Trump’s confrontational approach to the WTO, the Geneva – based organization that draws up and enforces global trade rules. By blocking the replacement of the WTO’s supreme court, the appellate body, Trump has made it powerless to resolve disputes.
Biden can use the issue as leverage to persuade the WTO to implement changes that the US has been demanding for years. These include making it easier for Washington to sue other countries for unfairly subsidizing their businesses or dumping products at artificially low prices in export markets.
“You can find something the U.S. has been looking for for a long time: Reforms,” Lovely said.
Similarly, Biden’s team will probably not be in a hurry to lift the tariffs imposed by Trump on $ 360 billion worth of Chinese imports in a dispute over the general belief that Beijing uses robbery tactics, including cyber theft, to undermine US technological dominance. to pick up. U.S. policymakers across the political spectrum are frustrated by what they see as China’s illegal trade practices, the oppression of the Uighur minority, the suppression of differences of opinion in Hong Kong and aggressive territorial claims in the South China Sea. Biden’s government is unlikely to facilitate.
Nathan Sheets, who served as secretary of state for international affairs in the Obama administration and is now chief economist at PGIM Fixed Income, said he thinks that before Biden’s trading team agrees to reduce or cancel Trump’s tariffs, it likely to demand comprehensive changes in Chinese policy. – changes that can take years if they happen at all.
“It’s not like (the rates are) a short-term bargaining chip: ‘You give us x, and we give you,'” Sheets said. “They want to keep the heat on China.”