President-elect Joe Biden will face enormous pressure from industry and allies to pull back President Donald Trump’s trade wars and ditch his tariffs.
But unraveling many of those Trump policies may have to wait. Though the former vice president said he will immediately reengage allies to combat China, the campaign said that any new trade deals would be considered only after investments in infrastructure and a coronavirus stimulus package.
It’s an approach that has buy-in from Democratic trade leaders in Congress, with Oregon Rep. Earl Blumenauer, head of the Ways and Means Trade Subcommittee, saying there’s no need to pretend a new trade deal will be “part of a 100-day agenda.”
But some analysts are skeptical of the hands-off attitude, saying allies will immediately demand a reversal of many Trump administration trade policies with the Biden win. And they note the president-elect has some far-reaching trade priorities of his own, like using new deals to fight climate change.
Some Democratic trade veterans say the campaign’s focus on domestic issues obscures a debate between the nascent Biden administration — and the larger Democratic party — over whether to return to the free-trading agendas of Presidents Barack Obama and Bill Clinton, or to take a more populist tack to protect the environment and pay workers more.
“I think there’s a battle going on,” said Beth Baltzan, a former trade lawyer for the House Ways and Means Committee, between moderate Democrats who think “more trade is always better and liberalization is the answer to everything” and more progressive elements.
But calling a truce on some of the Trump White House’s trade wars could provide an opportunity to enlarge the U.S. manufacturing workforce. Despite gaining 66,000 jobs in September, factory employment is still down 647,000 jobs from February because of the pandemic, according to Labor Department statistics. Eliminating some of Trump’s tariffs, which Biden has labeled "damaging" and "disastrous," could provide a quick assist to manufacturers, which have been hurt by the resulting higher import prices and restricted access to foreign markets, some economists say.
“If the next administration was able to end the trade wars, to eliminate tariffs and to continue to stop essentially taxing Americans for buying foreign goods, I think we would see a big explosion in manufacturing in the United States and really boost the prospects of a recovery,” said Michael Hicks, an economist at Ball State University who studies Midwestern manufacturing. “[I]f we see a second term of the Trump presidency, I would expect manufacturing employment to not be able to crawl back to what it was at the end of the Obama administration.”
The timeline for doing so, however, is unclear. Though Biden could in theory lift the restrictions as soon as he takes office, he must also answer to a mix of conflicting interests, including corporations, unions, progressives, farmers and U.S. allies — suggesting he could choose to leave the tariffs in place for months, or even years, as he determines what stays and what goes.
His "Made in America" plan advocates for a "pro-American-worker tax and trade strategy" but does not explicitly reference tariffs; he wrote to the United Steelworkers in May that he plans to "use tariffs when they are needed, but the difference between me and Trump is that I will have a strategy — a plan — to use those tariffs to win." A top trade adviser said Sept. 22 that Biden isn’t ruling out new tariffs on imports.
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