How will Joe Biden change US trade relations?
- Published
Chinese handbags, French wine and Scottish cashmere: all have been weaponised by President Donald Trump, the self-proclaimed tariff man.
In his attempt to put "America first" - for jobs and profits - the president liberally applied tariffs, charges to imports, from those nations he judged as trying to give their producers an unfair advantage - with few discernible benefits to his home territory.
How much of a difference will a change of guard in the White House make to American trade policy? Will that long-awaited US-UK trade deal finally be struck? And can Italian parmesan makers catch a break?
Here's five things to be aware of:
1. Joe Biden's priorities aren't that different
Joe Biden's "Buy American" slogan from his campaign has echoes of the Trump playbook.
With US unemployment having more than doubled during the course of the pandemic, promises to bolster livelihoods on home soil have a potent appeal.
Mr Biden's pledges include penalising US firms that move jobs abroad. And like Mr Trump, he harbours concerns over China's ambitions and way of doing business.
2. Same dream, different means
But Mr Biden has very different ideas of how to triumph on the global stage.
President Trump opted to go it alone, using tariffs and threats against China while attempting to coerce Europe into joining his battle against the likes of Huawei.
Mr Biden prefers the idea of strength in numbers - a multilateral approach - by getting traditional allies onside.
3. A reset of the EU trade relationship
That is likely to mean offering an olive branch to the EU, with an offer to pour (lower tariff) oil on troubled waters.
The spat between US aircraft maker Boeing and European rival Airbus over claims of unfair state help preceded President Trump. But it was he who decided to levy tariffs on $7.5bn (£5.7bn) worth of European luxuries in response.
Analysts feel Mr Biden will, at the least, shy away from escalating the tariffs and may well remove existing ones - ditto those applied to imports of steel and aluminium.
The threat of car tariffs is also likely to recede. But the producers of Bordeaux wine may have to wait - with so much on the domestic agenda, tearing down those barriers may take a backseat.
4. A less 'special relationship'?
And the UK may be even further back in that queue.
Although British trade officials have been wooing Mr Biden's team for some time, they aren't likely to be in a hurry to sign a deal with the UK.
The incoming president is famously no fan of Brexit and has said that there will be no deal if the Good Friday Agreement is undermined.
That was after the UK's proposed Internal Market Bill risked the imposition of a physical customs border between the Republic of Ireland and Northern Ireland.
The UK government has quietly been nursing hopes that an agreement will be in place by the middle of next year, before an arrangement to fast-track a deal through Congress expires.
That might be dashed. But there could be a workaround: both Mr Biden and the UK are eyeing membership of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a free-trade partnership of 11 Pacific countries.
5. It's not just goods
There is more to trade than shipping containers lining ports.
For example, while President Trump viewed the World Trade Organization with suspicion and derision, there are hopes that Mr Biden will focus instead on encouraging reform and modernisation of the organisation, which polices global trade.
There will, however, be some remaining tensions: the issue of a digital services tax from Europe on the profits of primarily US tech companies remains.
Ultimately, while there is potential for a change in trade stance from a new president, his bulging domestic in-tray may distract him for some time.
- Published24 September 2020
- Published15 September 2020
