Trade experts say Biden’s hand may be tied to Trump’s China tariff


US Vice President Joe Biden comments in the Strategic and Economic Dialogue (S & amp; ED) at the State Department of Washington on June 23, 2015.

Yuri Grips | Reuters

“Harmful,” “careless” and “destructive” are some of the terms used to describe the tariffs imposed by Donald Trump on allies and rivals alike. If he is elected President of the United States in November, he can hold some space.

Republicans largely abandoned traditional party goals such as unfit trade and balanced budgets to embrace Trump’s “America First” agenda. For Democratic-Party challenger Biden, with a history of supporting free trade, but also for voices calling for a different approach, the task is not so straightforward.

Faced with demands by farmers and US corporations for tariff reductions and those eager for less disruptive China trade relations, Biden is supported by labor unions, which are job security and infrastructure spending, and progressives that support climate change, Want action on low drug prices and human rights.

Former and current advisers, lobbyists and business analysts say a mix of conflicting interests adds to a wait-and-see approach that Biden could inherit from Trump for many years.

“It’s unclear how he would balance these various competing forces,” said Mary Lovely, a Syracuse University economics professor and senior fellow at the Peterson Institute for International Economics.

According to US Customs and Border Protection data, the Trump administration has put the Trump Administration’s costs on Chinese goods at some $ 61.6 billion to US importers in 2018 and 2019, and to destroy US manufacturing competition. Has been blamed for

Tariffs on steel, aluminum, washing machines, solar panels and European Union goods added $ 12.2 billion to punitive collections through Sept-2.

America’s trade deficit with China decreased in 2019, but data from the Census Bureau on Thursday showed that the country’s trade gap widened to $ 63.6 billion in July, the highest in 12 years, nearly half of that Belongs to China.

Trade experts say Biden’s hands may be tied.

A former treasurer of the Obama administration said that Nathan Sheets, who negotiated with China on economic issues, said, “I don’t see a scenario in which he could go in the first 6-12 months and raise those charges.”

“The current political climate – left, right and center – requires Biden’s strictures on China,” said PGIM Fixed Income Chief Economist Sheets.

From free trade to fair trade

Biden has supported free trade in his three decades in Congress, during a period when growing globalization was seen as a path to prosperity. He supported China’s entry into the North American Free Trade Agreement (NAFTA) of 1994 and the World Trade Organization in 2001.

As vice-president, he was a vocal proponent of the Trans-Pacific Partnership, the Obama administration’s effort to counter China’s growing influence in Asia.

Support for free trade has given Trump ammunition for Trump to be “soft on China” and to allow American jobs to be moved to low-wage countries.

He is not afraid to use trade barriers – Biden said, but only when they make sense.

“, I’ll use the tariffs when they need to, but the difference between me and Trump is that I’ll have a strategy – a plan – to use those tariffs, not just for counterfeit toughness,” Biden said In May, the Steelworkers Union wrote in a statement in the United States. Steel and aluminum tariffs will remain up to a global solution to limit excess production – largely concentrated in China – to be negotiated, it said.

Biden’s “Made in All America” ​​economic plan suggests using carbon-based tariffs to punish countries that fail to meet climate targets, a move that would be aimed at the United States over global warming Can be curious.

The plan also includes World Trade Organization reforms, and “aggressive trade enforcement actions” against unfair practices by China and other countries, including currency manipulation, dumping low-cost exports, and “misuse of a state-owned company, Or improper subsidies are included. ” ”

The Trump administration aimed to address Chinese dumping and state subsidies, but does not make a Phase 1 trade deal.

Making peace with colleagues on business

Biden campaign policy adviser, Jeff Prescott, said Biden is the best way to deal with allied countries in China.

He said that working with Europe, Japan and other allies could bring China to bear “a significant percentage of the global economy” to prevent non-market practices and improve WTO regulations.

Trump still has the support of several blue-collar workers in the swing states of Michigan, Ohio, Pennsylvania and Wisconsin, but Biden is supported by the nation’s largest union group.

Richard Trumka, president of AFL-CIO, said on Thursday that he believes Biden will implement regulations to “keep workers safe” in the epidemic, encouraging a resurgence of key supply chains and a stronger “buy American” The major infrastructure will use tax incentives to drive spending. Requirements.

Trump, he said, “is no longer up for his campaigning.”

John Lieber, the US managing director for the Eurasia Group’s political risk consultancy, said that what Biden is proposing is a different brand of economic nationalism than Trump, “low odds for China completely incompatible with that goal Will be. ”

Whatever decisions are made on trade, Biden advisers say the pre-Trump trade is not going back to consensus, where businesses successfully pushed US governments to consistently lower trade barriers, citing globalization.

“There is a kind of recognition that ultimately the goal of international economic policy is not to secure the world for multinational corporations to do business,” Prescott said. “It’s basically about jobs in the United States, about the middle class at home and building our economy here.”

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