WASHINGTON (AP) – In his first weeks in office, President Joe Biden wasted no time in throwing out a number of major Trump administration policies. He joined the Paris climate agreement. He ended the ban on travelers from most 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 their toes around one of Donald Trump’s most divisible legacies: his move to start a trade war with China and block some of America’s closest allies with a series of tariffs on steel, aluminum and other goods. In a seven-decade increase in presidential support for free trade, Trump has promised to reduce the US trade deficit and restore millions of jobs in lost American factories.
In the end, after most accounts, Trump’s tariffs hit very little – and they managed to antagonize some of America’s closest trading partners.
However, for the time being, the Biden administration seems intent on approaching trade with caution and deliberation. Perhaps most striking is what Biden did not do: he did not cancel Trump’s trade war with China. He did not promise to reduce or cancel tariffs on imported metals or end a stalemate that has left the World Trade Organization unable to act as an arbitrator in global trade disputes.
Instead, the administration’s decision-makers are focusing on other, unrelated priorities – distributing COVID-19 vaccines as soon as possible and providing much more aid to a pandemic economy, which has not yet regained nearly 10 million jobs. lost work since February.
“It will take time,” said Mary Lovely, an economist at the University of Syracuse who is a senior member of the Peterson Institute for International Economics. “Biden has repeatedly said that he needs America to be stronger before he can take on a lot of these trade issues.”
One factor could be that reversing all of Trump’s policies could increase the risks for a Democrat who is close to unions dissatisfied with the pre-Trump American free trade consensus. Politically, Biden depends on support in the producing cities of the Midwest. These areas have suffered from low-priced imports from China, Mexico and elsewhere.
“There is competition for state voters who are in favor of (commercial) protection,” said Daniel Ikenson, director of trade policy studies at the Cato Libertarian Institute.
Democrats are still amazed by Trump’s surprise victory in 2016 and a few trade-related factors behind it. Trump has abandoned the support of the modern Republican Party for free trade agreements favored by American corporations that have deep connections abroad. Instead, Trump has thrown himself as a populist advocate for longtime workers – a champion “primarily in America” that would eradicate unfair trade practices and restore jobs in American factories.
For Democrats, Trump’s 2016 victory, largely due to blue-collar voters, offered “a hard lesson in the dangers of a trade policy that doesn’t think about working people, but (benefiting) from 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 asserting his lifelong ties to working-class America, has promised a trade policy that will create or protect jobs in the United States.
“We will use trade, in coordination with both international and domestic economic instruments, to create more inclusive prosperity for America and Americans,” said Katherine Tai, Biden’s choice to be the US trade representative. a speech last month for the National Foreign Trade Council.
Biden’s vision, she said, “is to implement a worker-centered trade policy.”
The new president has promised at least a significant shift from Trump’s trade stance to all: Biden wants to end relations with key US allies, such as the European Union and Canada, who have been puzzled and angered by his mercurial and belligerent rhetoric. Trump. and actions.
In the end, anyway.
“The mantra was: ‘No sudden move’ on trade – and rather a focus on fighting the pandemic and providing more economic relief,” said William Reinsch, a former US trade official now at the Center for Strategic and International Studies.
Consider Trump’s tariffs on foreign steel and aluminum, which he imposed in 2018. Reducing or lowering these taxes would seem like an easy way to heal the wounds.
U.S. allies have been particularly upset by Trump’s dubious justifications for sanctions: dusting off a little-used trade policy tool – Section 232 of the 1962 Trade Extension Act – said their aluminum and steel posed a threat to US national security. This was a harsh insult to close allies, such as Canada, which fought alongside the United States in conflicts from World War I to Afghanistan.
However, the Biden administration has shown little inclination to go fast on this issue. At the confirmation hearing, Trade Secretary Gina Raimondo avoided a question about metal tariffs. She told Senator Roy Blunt, R-Mo., That she would only consider his view that Missouri producers were hurt by tariffs and “take their needs into account.”
By exerting political pressure from the other side, a coalition of steel companies and workers wants to keep the tariffs. Last month, they sent a letter to Biden saying they needed urgent help in a weakened COVID economy.
“Imposing tariffs is always easier than raising them,” said Wendy Cutler, a former US trade negotiator who is now vice president at the Asia Society Policy Institute.
Biden chose last week to restore aluminum tariffs in the United Arab Emirates that Trump raised when he left office. Trump, apparently rewarding the UAE for his diplomatic recognition of Israel, has replaced tariffs with aluminum quotas in the United Arab Emirates.
“Imports from the United Arab Emirates,” the White House said in a statement, “may replace domestic production and therefore threaten to affect our national security.”
If the administration finally decides to reduce or end tariffs on metals, 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 an American buying action that Biden announced whose goal is to channel more federal dollars to support American industries.
Then again, far from abandoning the controversial national security tariffs, the administration could only consider using them themselves – but in a different way: to combat climate change.
In August, Peter Harrell, Biden’s new international economic adviser to the Biden National Security Council, argued that if Congress did not act on the issue, the president could use section 232 to impose tariffs on air-polluting products and countries or block investments in environmentally friendly projects.
Trump’s use of tariffs “created a clear openness for a future Democratic president to impose large-scale tariffs and sanctions to combat climate change,” Harrell wrote in Foreign Policy magazine.
The Biden team will also have to decide whether to rethink Trump’s confrontational approach to the WTO, the Geneva-based organization that establishes and enforces global trade rules. By blocking replacements to the WTO’s Supreme Court, the Appellate Body, Trump has made it impossible to resolve disputes.
Biden could use this issue as a lever to persuade the WTO to adopt changes that the US has been calling for for years. These include facilitating Washington to bring cases against other countries for unfairly subsidizing their companies or dumping products on export markets at low artificial prices.
“You can get what the US has been looking for for a long time: reforms,” Lovely said.
Similarly, Biden’s team is in no hurry to raise $ 360 billion in tariffs on Chinese imports in a dispute over widespread belief that Beijing uses looting tactics, including cyber -furt, in its effort to overcome the technological dominance of the United States. US policy makers across the political spectrum are frustrated by what they see as China’s illicit trade practices, the repression of the Uighur minority, repression of Hong Kong dissent and aggressive territorial claims in the South China Sea. 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 she believes that before Biden’s sales team agrees to reduce or reduce cancel Trump’s tariffs, will likely call for radical changes in Chinese policy. – changes that could take years, if they happen.
“It’s not like (tariffs are) a short-term bargaining chip: ‘You give us x, and we’ll give you,'” Sheets said. “They want to keep the heat on China.”