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Biden will pursue many Trump goals, but will resort to less one-sided policies
With the announcement of the appointment of the former president of the American Central Bank (Fed), Janet Yellen as future secretary of the United States Treasury, President-elect Joe Biden begins to clearly outline the configuration of his economic team.
The next government will face a number of challenges in this area, starting with putting the country on the path of economic recovery after the severe crisis caused by the covid-19 pandemic, but it will also face many challenges beyond its borders, in when it comes to business relationships.
“In his attempt to put ‘America first’ in terms of jobs and profits, President Donald Trump taxed imports from nations that he thought were trying to give their producers an unfair advantage, with little perceived benefit to the US. “Says Dharshini David, BBC correspondent for global trade issues.
But what will the management change in the White House mean for US trade policy?
We highlight six key factors to consider, from global goals to positioning on Latin American issues:
1. Between the priorities of Biden and Trump, there are not so many differences
Joe Biden’s “buy American goods” slogan during the election campaign recalls some of Trump’s proposals.
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Both Trump and Biden Promote Nationalist Thinking of ‘Buy American Goods’
Given that unemployment in the United States more than doubled during the pandemic, promises to help improve the chances for American citizens to earn a living have great appeal.
In that sense, Biden promised, among other things, to penalize US companies that transfer jobs abroad.
And like Trump, he is concerned about ambitions and how to do business in China, a country with which the current administration has waged a tough trade war.
2. Same dream, but different means
A fundamental difference is that Biden has very different ideas than Trump’s about how to succeed on the world stage, highlights the BBC specialist journalist.
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Mike Pompeo, Secretary of State of the Trump administration, tried to attract other countries to the fight between the US and China through the Huawei company.
President Trump chose to pursue this goal unilaterally, using tariffs and threats against China while trying to coerce Europe into joining his showdown with companies like Huawei.
Biden prefers the idea of joining forces with other partners, applying a multilateral approach that encourages America’s traditional allies to participate in this joint effort.
This likely means offering “an olive branch” to the European Union, with an offer to cut recently imposed tariffs to ease the confusion, David says.
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The Trump administration has imposed heavy tariffs on many European products in retaliation for the state subsidy received by European aircraft manufacturer Airbus.
The dispute between the American aircraft manufacturer Boeing and its European competitor Airbus over state subsidies existed before Trump arrived at the White House, but it was he who decided to respond by imposing tariffs on European luxury products worth 7.5 billion dollars. . .
Analysts believe that Biden will, at the very least, avoid raising tariffs and may even eliminate existing tariffs, such as those applied to steel and aluminum imports.
The threat of taxing auto imports is also likely to disappear.
In this context, however, Bordeaux wine producers may have to wait, as with so many pending issues internally, Biden may put the breaking down of customs barriers in the background.
4. A less “special” relationship?
Trade relations with the UK may also fall on the Biden government’s priority list, despite the traditional “special relationship” the two countries have had for decades.
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Biden opposes the establishment of a possible rigid border between Northern Ireland and the Republic of Ireland as a result of Brexit
Although British trade officials have been courting the president-elect team for some time, Washington is unlikely to be in a rush to sign a deal with the UK.
It is known that Biden is not exactly a supporter of Brexit and, in addition, he has already said that there will be no negotiation if the 1998 Belfast Agreement (also known as the Good Friday Agreement), which sealed the peace between the Irish, is not respected.
The fear of this happening is related to the UK’s proposed Internal Market Act, which provides for the possible imposition of a rigid customs border between Northern Ireland (which is part of the UK) and the Republic of Ireland (which is an independent country and member of the European Union).
5. What about Latin America?
In commercial terms, Biden will inherit the United States-Mexico-Canada (T-MEC) agreement, the result of Trump’s renegotiation of the North American Free Trade Agreement (NAFTA), which was in force from the beginning. of the century __.
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The renegotiation of the free trade agreement with Mexico and Canada is considered one of Trump’s achievements
The new administration welcomes the T-MEC, approved by the United States Congress with strong support from both Republicans and Democrats. The treaty is considered today by many as the standard to be followed in this type of trade agreement, since it contains strict clauses on issues of workers’ rights and protection of the environment.
Many analysts expect to see changes in trade relations with Cuba, which suffered a major setback during the Trump administration, which re-imposed restrictions on the island after the rapprochement made in the Obama era, when the current president-elect was the country’s vice president.
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Biden worries about China’s ambitions and how the country does business
In any case, analysts do not predict that trade relations will be at the center of relations with Latin American countries, although they predict that the new White House will assume a less transactional stance in relations with the governments of the region and that it will change a little. focus. from Trump, focused on issues such as migration and security, to a broader agenda that prominently includes development cooperation.
6. In addition to trade in goods
But trade policy goes far beyond shipping cargo-laden containers that fill ports on a daily basis.
For example, while Trump looked suspiciously at the World Trade Organization (WTO), “there are those who hope that Biden will bet on promoting the reform and modernization of that organization, within which the framework of rules governing world trade is established. “says the BBC correspondent on global trade issues.
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WTO reform is seen as a necessary step to address some of the problems facing world trade
In any case, however, there will always be some pending tensions, such as the issue of the tax on digital services that Europe wants to apply to the profits of large technology companies (mainly American).
Ultimately, the BBC correspondent emphasizes that “while there is the possibility of a change in the business position of the new president, his voluminous agenda of internal affairs to be resolved may divert the focus from these issues for some time.”
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