WASHINGTON (AP) – In his first weeks in office, President Joe Biden wasted no time in throwing out a lot of Trump’s administrative policies. He rejoined the Paris climate agreement. It ended the ban on travelers from predominantly Muslim countries. He canceled the Keystone XL pipeline. He reversed the ban on transgender people militating. Etc.
Biden and his team are on their toes, though, around one of Donald Trump’s most divisive signing legacies: his moves to start a trade war with China and knock down some of the closest allies to the states United with a range of tariffs on steel, aluminum and other goods. By raising seven decades of presidential support for free trade, Trump promised to reduce the U.S. trade deficit and restore millions of jobs to lost American factories.
In the end, by most accounts, Trump’s tariffs hit very low and managed to antagonize some of the U.S.’s closest trading partners.
Still, for now, the Biden administration seems intent on approaching the trade with caution and deliberation. Perhaps most surprising is what Biden has not done: he has not canceled Trump’s trade war with China. He has not promised to reduce or cancel his tariffs on imported metals or put an end to a dead end that has left the World Trade Organization unable to function as an arbitrator in global trade disputes.
Instead, government officials are focusing on other unrelated priorities: distributing COVID-19 vaccines as quickly as possible and providing much more aid to a pandemic economy that has yet to recover nearly 10 million jobs lost. since February.
“It will take your time,” said Mary Lovely, an economist at Syracuse University who is a senior member of the Peterson Institute for International Economics. “Biden has repeatedly said he needs the United States to be stronger before taking on 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 dissatisfied with Trump’s pre-trade free trade consensus. Politically, Biden depends on support for the manufacturing towns and cities of the Midwest. These areas have suffered low-priced imports from China, Mexico and elsewhere.
“There is competition for swing state voters who are in favor of (commercial) protection,” said Daniel Ikenson, director of trade policy studies at the Cato Libertarian Institute.
Trump’s surprise victory in 2016 and some of the trade-related factors that Democrats are pursuing are still plummeting. Trump abandoned modern Republican party support for free trade agreements favored by U.S. companies that have deep overseas connections. Instead, Trump launched himself as a populist advocate of patient manufacturing workers, a “first American” champion who would eradicate unfair trade practices and restore jobs in American factories.
For Democrats, Trump’s 2016 victory, largely due to blue-collar voters, provided “a hard lesson about the dangers of a trade policy that is not thinking of working people but (by benefiting) of finance and agribusiness, “said Lori Wallach, director of Public Citizen’s Global Trade Watch.
Aware of this lesson, Biden’s team, led by a president who rarely tires of affirming his lifelong ties to the working-class United States, has promised a trade policy that will create or protect jobs. work in the United States.
“We will use trade, in coordination with national and international economic tools, to create more inclusive prosperity for the United States and Americans,” said Katherine Tai, Biden’s choice to be the U.S. trade representative, in a speech presented last month to the National Foreign Trade. Tip.
Biden’s vision, he said, “is to implement a worker-centered trade policy.”
The new president has promised at least one significant change from Trump’s trade stance on the entire United States: Biden wants to establish relations with key U.S. allies, such as the European Union and Canada, who were baffled and infuriated by the rhetoric Trump’s mercurial and belligerent. and actions.
Finally, anyway.
“The mantra has been, ‘No sudden movements’ in trade, and focus on fighting the pandemic and delivering more economic relief,” said William Reinsch, a former U.S. trade official who is now in the Center for Strategic and International Studies.
Think of Trump’s tariffs on foreign steel and aluminum, which he imposed in 2018. Reducing or lowering those taxes would seem like an easy way to heal wounds.
U.S. allies were especially angry at Trump’s dubious justification of sanctions: removing a little-used tool from trade policy (section 232 of the Trade Expansion Act of 1962), he stated that aluminum and l steel posed a threat to U.S. national security. It was a harsh insult to close allies like Canada who have fought alongside the United States in conflicts from World War I to Afghanistan.
However, the Biden administration has shown little inclination to move quickly on the issue. At her confirmation hearing, incoming trade secretary Gina Raimondo dodged a question about metal tariffs. He told Sen. Roy Blunt, R-Mo, only that he would consider his point that Missouri manufacturers have been affected by tariffs and “would take their needs into account.”
Under political pressure on the other side, a coalition of steel companies and workers wants to preserve tariffs. Last month they sent Biden a letter arguing that they needed urgent help in an economy weakened by COVID.
“Imposing tariffs is always easier than raising them,” said Wendy Cutler, a former U.S. trade negotiator who is now vice president of the Asia Society Policy Institute.
Biden even chose last week to reinstate the aluminum tariffs in the UAE that Trump had raised when he left office. Trump reportedly rewarded the UAE for its decision to diplomatically recognize Israel, had replaced tariffs with UAE aluminum quotas.
“Imports from the UAE,” the White House said in a statement, “may still displace domestic production and therefore threaten to deteriorate our national security.”
If the administration finally decides to reduce or end metal tariffs, it could offset the impact by adopting a public works program that requires a lot of steel and aluminum. Or it could offer the benefits of a Buy American boost that Biden has announced whose goal is to channel more federal dollars to support U.S. industries.
Again, far from abandoning the controversial national security tariffs, the administration could only consider using them itself, but in a different way: to combat climate change.
In August, Peter Harrell, the new international economic adviser to the Biden National Security Council, argued that if Congress does not act on the issue, the president could use section 232 to impose tariffs on products and countries that pollute the world. ‘air or to block investments in projects that pollute the environment.
Trump’s use of tariffs “has created a clear opening for a future Democratic president to impose far-reaching tariffs and sanctions to combat climate change,” Harrell wrote in Foreign Policy magazine.
Biden’s team will also have to decide whether to rethink Trump’s confrontational approach to the WTO, the Geneva-based organization that sets and enforces global trade rules. By blocking substitutions in the WTO’s highest court, the appellate body, Trump left dispute resolution powerless.
Biden can use the issue as a lever to convince the WTO to adopt changes that the United States has been calling for for years. Among other things, it is about making it easier for Washington to file cases against other countries for unfair subsidies to their companies or for dumping products into artificially low export markets.
“You can get something that the United States has been looking for a long time: reforms,” Lovely said.
Similarly, Biden’s team is unlikely to be in a hurry to raise the tariffs Trump imposed on Chinese imports worth $ 360 billion in a dispute over the widespread belief that Beijing uses predatory tactics, including cyber-encounter, in its drive to overcome the technological dominance of the United States. U.S. policymakers across the political spectrum are frustrated by what they see as China’s illicit trade practices, repression of the Uyghur minority, repression of dissent in Hong Kong, and aggressive land claims at sea. of South China. The Biden administration is unlikely to relax.
Nathan Sheets, who served as undersecretary of the Treasury for international affairs in the Obama administration and is now chief economist at PGIM Fixed Income, said he thinks that before the Biden sales team agrees to reduce or cancel the Trump’s tariffs will likely require radical changes in Chinese politics. – Changes that can take years, if they occur.
“It’s not like (rates are) a short-term bargaining chip: ‘Give us x and we’ll give you,'” Sheets said. “They want to keep the heat in China.”