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Margarita Šešelgytė, Director of the Institute of International Relations and Political Science at Vilnius University:
First, our association remains, especially in the field of security, because before the elections, J. Biden has said that the Baltic States will be in his orbit, and the security of the Baltic States is very important to him. Second, there are other important elements: the Paris Climate Agreement, support for international law and international institutions, the international order that is important to him, and the leadership of the United States in that order. This is important to us as small participants in that order.
America’s relations with Europe are important. We benefit when they are good, when there is no division, when the United States and Europe go hand in hand. This is very bad news for authoritarians who, seeing disagreements and anger, have tried to settle in that vacuum. “Biden’s promise to review the transatlantic trade agreement is very good news for us, we will win.”
Luminor Bank economist Sigismund Mauricas:
“International trade will have a positive impact: Biden is unlikely to conflict with the European Union, and the issue of trade wars will be less serious, although with China it will remain something.” The Chinese yuan strengthened with Biden’s victory. There will be less uncertainty with Biden.
There are many unknowns in energy. The United States is playing an increasingly important role in Europe due to the shale oil and gas revolution, it has become a significant enough player in the gas sector by driving Russia out of the European market. This US strategy has helped keep oil prices low. Biden promises to invest in renewable energy. The question is whether there will be subsidies with shale oil and gas producers. Otherwise, some companies may withdraw from the market and this will again increase Russia’s influence in the Middle East oil market. And Lithuania will depend on oil and gas for another 10-20 years.
The third thing is ideological. Biden is determined to increase redistribution and will receive the income he needs from the tax increase. And if the United States takes the path of higher spending, when deficits are staggering and a more significant role for the state, so will the ideological impact on European countries. There will be no more disincentives and the EU countries will follow the same path with very clear long-term consequences. Lithuania can also change: there will be proposals to increase costs ”.
Alexander Izgorodin, Economist at SME Finance:
“J. Biden announced his commitment to building alliances, promoting and enhancing transatlantic political ties. This means for Europe that the bad economic relations with which Trump had will no longer exist and the trade war is likely to end. That is good for both Lithuania and the EU. If EU exports to the US increase, so will Lithuanian exports. Mr Biden’s attitude towards green energy is also good for Europe.
But there are many questions. Mr. Biden intended to increase the corporate tax on corporations. This means that as the United States begins a more serious recovery from the coronavirus, companies will have to bring more revenue to the budget. When American companies have to pay higher corporate taxes, they will have less retained earnings and have nothing to buy from European consumer goods, such as technology, machine tools, or less.
Biden and Trump’s position on promoting China and domestic business is essentially identical. They tend to shorten supply chains, which means returning the most important business to the US, encouraging it to leave other countries. This worries China in the first place, but it can affect Europe as well. It will not be good for the world economy if relations between the United States and China do not improve. But Biden isn’t even going to improve those relationships, he’s just going to use other methods. Economic relations with China will not improve.
In principle, Europe will benefit from the Biden presidency because it will be easier to work with the United States, cooperation will be broader, but no ‘space’ is worth waiting for, as both tend to promote local business.
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