President Biden is facing tough choices on trade policy after four years of rising tensions, steep tariffs and isolationism from former President Trump
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Biden and his team have put trade issues on the back burner for now as the new administration races to ramp up vaccine distribution, shepherd nearly $2 trillion in aid through Congress, and control the coronavirus pandemic.
Officials have ruled out Biden signing new trade deals before he approves major investments in the domestic economy and declined to say what the president will do with tariffs he inherited from Trump.
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Even so, Biden could soon face pressure to tackle the myriad trade issues on his plate and political blowback from both parties depending on the path he takes.
Trump made curbing China’s anti-competitive economic practices a centerpiece of his agenda and sought to do so with tariffs on billions of dollars on Chinese goods. While trade experts credit Trump with pushing the needle on China’s misconduct, they say he left office with little to show for it other than heightened tensions.
“There's just no getting around the fact that China is the primary geopolitical rival for the United States in the world right now,” said Edward Alden, senior fellow at the Council on Foreign Relations (CFR).
“It doesn't mean that there aren’t plenty of opportunities for mutual gain. But the somewhat naive notion that China is going to be so invested in the global trade and economic order that it won't seek to change it, nobody believes that in the United States anymore.”
With U.S.-China relations at their lowest point in decades, experts say Biden must find ways to hold Beijing accountable for economic and human rights abuses while protecting the U.S. economy from retaliation.
Alden said the Biden administration must forge a new strategy for dealing with China that cracks down hardest on areas crucial to national security and competitiveness.
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“Parts of the economy that are vital for U.S. economic leadership, semiconductors, artificial intelligence, next generation biotechnology, aerospace, things like that—the U.S. is going to have to maintain a more competitive posture,” he said.
Otherwise, Alden said the U.S. should focus on restoring the World Trade Organization appellate body and coordinate with allies to push China away from illegally subsidizing state producers and play by the rules of international trade.
The Biden administration has pledged to use the “full array of tools” necessary to curb China’s unfair economic practices. Even so, they’ve ceded that pushing China to reform is nearly impossible without the help of U.S. allies that Trump spurned throughout his presidency.
“It will really take a long time to restore global trust regarding American sincerity and being a force for good,” said Marie Kasperek, senior fellow at the Atlantic Council. “The U.S. can’t continue to go it alone if they really want to have a long-term effect here.”
While the U.S. and Europe have a long history of squabbling over trade, the unique intensity of Trump’s rhetoric and tariffs threats upended the trans-Atlantic partnership experts say is crucial to holding China accountable. Trump’s decision to impose steel and aluminum tariffs on the E.U., Mexico and Canada, a decision he said was in the nation’s national security interest, also pushed those close U.S. allies further away.
Biden has already taken some steps to unwind Trump’s “America First” foreign policy and reengage with allies, such as rejoining the Paris climate accords and World Health Organization. Repairing the rift caused by Trump’s trade battles, however, may take more time and could be complicated by Europe’s increasing willingness to chart its own course.
“Trump's trade policy was very aggressive towards both allies and trading partners alike, and he kind of upended a lot of the status quo,” said Halie Craig, an associate fellow at the R Street Institute, a think tank that promotes free-market policies.
“Biden will have a lot to do in terms of repairing those relationships, and I don't think it's going to be as easy as just going out there and saying like, ‘Oh, well I support multilateralism and we really want to work with our allies again,’” Craig added.
Biden also faces challenges in the politically tricky nature of trade, which cuts across partisan lines like few other economic issues.
Trump’s protectionist trade policy was a much easier fit with Democrats — many of whom opposed former President Obama’s efforts to join the Trans-Pacific Partnership — than Republicans, who traditionally favor open markets and free trade.
If Biden decides to repeal Trump’s tariffs on steel and aluminum, he may evoke criticism from liberal Democrats and labor unions. And while most Republicans were uneasy with Trump’s tariffs on Chinese goods, repealing those taxes without another penalty to replace them could draw fire from the GOP.
Republicans have increasingly become more bellicose toward China, with many echoing Trump in blaming Beijing for the coronavirus.
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“The domestic politics of China are really, really hard because everyone on both sides of the aisle wants to be seen right now as very tough on China,” Craig said.
“Any kind of acknowledgement that they are such a big trading partner, that we may need to work with them is kind of a hard position for someone who's up for reelection to take.”
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January 24, 2021 at 07:00PM
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